Uganda- Expanding Term Lending: Housing & Construction Finance
The World Bank
Download Document| Date Published | 2008 |
| Version | |
| Primary Author | Simon Walley |
| Other Authors | |
| Theme | |
| Country | Uganda |
Abstract
This report is part of a broader piece of Economic & Sector Work (ESW) on the Ugandan Financial system funded by the FIRST Trust Fund. The focus on term financing in this report addresses some of the issues raised in the Country Economic Memorandum which advocated the need for financial sector reform, especially in the area of term financing. Many of the causes for the lack of term financing have been documented and analyzed. Therefore, the central objective of this note is to provide a policy framework to increase the level of long term financing directed towards housing and housing construction. The mission carried out a survey as part of its policy diagnostic analysis to identify obstacles to increasing the breadth and depth of the Ugandan financial system. Responses to the survey were received from virtually all financial market participants. The qualitative results are consistent with earlier reports and surveys done by the Bank of Uganda. The quantitative element of the survey did not receive sufficient responses to provide significant data for analysis. This note is split into three sections which describe (i) the current situation relating to housing finance/construction finance and the context within which lenders operate (ii) identifies some of the key obstacles which are preventing the housing finance system from operating optimally and (iii) provides a prioritized framework for improving the efficiency of the system. The recommendations contained in this note are designed to complement existing initiatives underway through the IFC’s Uganda Primary Mortgage Market Initiative (UPMMI), the World Bank’s Private Sector Competitiveness Project II (PSCPII) and the upcoming project funded by FIRST focusing on specific aspects of the Ugandan housing finance system.