Housing Finance in East Africa


The most recent regional profile for East Africa is from 2019– also available in French here.

To download the full 2019 East Africa regional profile, click here.

The East African Community (EAC) is a regional intergovernmental organisation bringing together the states of Burundi, Kenya, Rwanda, South Sudan, United Republic of Tanzania, and Uganda, with a combined population 172 million citizens. An estimated 22 percent of the region’s population resides in urban areas. The region’s economy has been growing, and is one of the highest in Africa, with Rwanda, Tanzania and Kenya having the highest economic growth in the region.

The commercial banking sector in the EAC is broad. There is also a strong presence of cross-border banking, whereby a 11 multinational and Kenyan-owned banks undertake cross-border banking in the EAC. Despite increased access to formal financial services, in Burundi and South Sudan, there has been a lag, with 12.5 percent of the Burundi’s adult population and only 1 percent of South Sudan’s adult population having access to financial services. Mortgage lending in the region is low. Lenders have been reluctant to expand their mortgage portfolios because of limited access to capital markets and stringent collateral requirements.

Housing affordability has remained a challenge in the region due to the high prices of completed houses, and expensive housing finance. Governments and other stakeholders in the region have continued to increase access to finance for home buyers. This has been through the formation of mortgage refinance companies in Tanzania and Kenya, and in Rwanda, through the development of various affordable housing development projects. In Uganda, banks such as the Housing Finance Bank and Bank of Africa have introduced 100 percent financing for residential mortgages.

Due to rapid urbanisation and lack of urban planning, countries in the EAC region have significant housing deficits, and home ownership remains out of reach for many households in the region. Some factors contributing to this include unaffordable housing finance, prohibitive urban land costs, insecurity of tenure, and high costs of construction.

A number of regulatory changes have affected housing and housing finance in the EAC region, seeking to expand the production and provision of affordable housing, the regulatory and administrative frameworks, and integrated human settlement planning and development.

Housing and mortgage markets in the region are however only likely to grow if affordability is increased along the housing construction and finance value chain. This would increase access to adequate shelter and impact the region’s economic development. Additional investment in the region can be stimulated with better access to data. In the EAC region, data access varies from country to country.

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