Housing Finance in Uganda

Overview

This profile is also available in French here.

To download a PDF version of the full 2020 Uganda country profile, click here.

The third largest country in East Africa, Uganda confronts housing provision as one of the most pervasive challenges faced by over two-thirds of Uganda’s population. The country is largely informed by private-sector led housing development, which is unable to meet the growing demand for affordable housing. Thus there is a widening deficit of housing, estimated at 2.4 million units, growing by 200 000 units a year.

According to the World Bank, Uganda’s economy is the third largest in the East African region, but has been severely affected by the COVID-19 global pandemic, locust invasions and rainfall-induced flooding in 2020. The country’s projected gross domestic product (GDP) for 2020 is significantly lower than that of 2019.

Currently, Uganda has a total value of USh1.6 billion (US$429 166) in residential mortgage loans collectively held by formal banking and non-banking financial institutions. Although the Bank of Uganda has reduced the interest rate, interest on mortgage loans remains relatively high at approximately 17 percent among those commercial banks offering mortgage loans.

However, for low income households, which account for more than 60 percent of urban households in Uganda, the formal housing economy is too expensive as they have limited means to access decent housing and face serious hurdles in accessing formal mortgage loans. Non-traditional microfinance offers competitive products for these lower-income households to meet their needs incrementally. Self-built housing, often constructed incrementally, is very typical and dominates the building market. Furthermore, Uganda has a vibrant unregulated land market, particularly in Kampala and other urban areas. Within this hybridised formal-informal market, more than 80 percent of transactions bypass the centralised registry.

Uganda’s affordable housing market segment thus holds substantial potential for investment, particularly as the country has a relatively stable economy. The housing backlog presents many possibilities for investing in rental and built-for-sale housing. Find out more information on the housing finance sector of Uganda, including key stakeholders, important policies and housing affordability:


Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2020 edition, which has up-to-date profiles for 55 African countries.

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