Housing Finance in Lesotho


This profile is also available in French here.

To download a pdf version of the full 2020 Lesotho country profile, click here.

Lesotho is a mountainous, landlocked country surrounded by the Republic of South Africa. The country is part of the Southern African Customs Union (SACU), and its economy is largely determined by South Africa’s economic performance. Growth has been subdued for several years due to the decrease in revenue from SACU, and the COVID-19 pandemic has worsened Lesotho’s macroeconomic prospects for 2020/21. Real GDP is expected to contract by 5.4 percent in 2020.

The financial sector is regulated by the Central Bank of Lesotho and is largely dominated by commercial banks, who offer mortgages. However, banks’ lending portfolios are highly concentrated in manufacturing, construction and retail lending, all sectors likely to be negatively impacted by the COVID-19 induced recession.[1] There are 55 registered microfinance institutions in Lesotho. In 2019, only two were providing housing-related loans in a specific housing portfolio.

A significant number of Basotho cannot afford to buy formally surveyed plots or developed houses despite 17 percent of Basotho earning a salary or a wage. This implies a gap in the housing supply which prevents most poor people from accessing affordable and adequate housing as they do not meet the commercial banks’ requirements for a loan. A small percentage, 23 percent, live in houses they financed through bank loans, while some build their homes themselves, and others live in homes they inherited.

The National Housing Policy estimates that a total of 98 711 dwellings will have to be constructed by 2025 to meet the demand for housing in Lesotho. Lesotho Housing and Land Development Corporation (LHLDC) is a government parastatal mandated to deliver formal housing in Lesotho, which has only recently began to cater to low income earners. Over recent years, several private housing developments have been implemented, by organisations such as Morero City Development and Habitat for Humanity.

Property markets are more skewed towards potential buyers in the middle to high income category, leaving out the lower income and only a few, mostly middle to high income earners rely on real estate agents. Unfortunately, the real estate sector is not regulated as there are no laws in place to guide its operations.

However, there are recent and ongoing reviews of financial regulations as well as housing and land policies/regulations that will hopefully support a more conducive environment for accelerated economic growth and investment climate in Lesotho.


[1] FitchRatings (2020). Fitch Revises Lesotho’s Outlook to Negative; Affirms at ‘B’. 13 August 2020.

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 2020 edition, which has up-to-date profiles for 55 African countries.

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