Housing Finance in Lesotho


This profile is also available in French here.

To download a pdf version of the full 2023 Lesotho country profile, click here.

Lesotho is a 30 588 km2 landlocked country bordered by South Africa.Lesotho had 2,159,067 inhabitants in 2021, with an annual growth rate of 0.78%. The urban population grows by 2.3% every year, while over 70% of urban expansion is informal due to private property subdivision. There is a scarcity of serviced land and transportation infrastructure in the affordable housing industry.

Agriculture, mining, and construction are expected to benefit from the Lesotho Highlands Project II (LHWP-II), the Mafeteng Ha Ramarothole Solar Photovoltaic (PV) Park, and the construction of the Maseru district hospital. COVID-19 is expected to reduce real GDP by 6.5 percent in 2020 and 1.0% in 2021.In 2021, the average annual inflation rate was 6.0%. Despite the expected economic recovery in 2021, poverty remains at 30.1%. More than half of the national budget is funded by South Africa.

Non-performing loans accounted for 3.3% of Lesotho’s gross loans in 2019 and 4.1% by 2021. Outstanding household mortgages stood at M23 515 899.70 (US$1 432 900.25) in 2022. There are 125 non-mortgage lenders. In 2012, Lesana Lesotho began selling mortgages. Lesana provides unsecured incremental loans for housebuilding to low- and middle-income government, state-owned, and commercial sector employees. Direct salary deductions, as agreed upon with employers, are used to reduce the risk of unsecured loans. Loan terms range from 6 to 60 months, with loan amounts ranging from M1,000 to M250,000.

In 2022, an unserviced urban residential plot in the capital will cost around M119/m2 (USD$7.25). 70% of households earn less than US$61 per month, and the majority of them can only afford an M48, 000 (US$2,925) home, which no bank will finance. According to UN-HABITAT, median household expenditures in Maseru’s major urban areas ranged from M10,000 to M20,000 per year (US$609 to $1,219).

As a result, the incremental microlending industry and microloans could play a significant role in home construction. However, affordable, planned, serviced land in suitable areas is difficult to find, particularly for low-income people. Green housing modules may reduce construction costs while improving thermal comfort for residents.

Find out more information on the housing finance sector of Lesotho, including key stakeholders, important policies and housing affordability:

Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2023 edition, which has up-to-date profiles for 55 African countries.

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