The Minister of Lands, Housing and Urban Development, Judith Nabakooba, has called on financial institutions to develop innovative mortgage solutions that can expand access to home ownership as Uganda battles a housing deficit estimated at 2.4 million units.
Speaking during the launch of mortgage products by Diamond Trust Bank (DTB), Nabakooba said increased participation by commercial banks in housing finance is critical to addressing one of the country’s biggest socio-economic challenges — providing affordable and decent housing for Ugandans.
She commended DTB for entering the mortgage market, saying the move goes beyond introducing a commercial product and represents a partnership with government and the private sector to address the country’s housing needs.
“You are not merely launching a commercial service; you are answering a national call. You are choosing to partner with government and the private sector to solve one of the most critical socio-economic challenges of our generation — providing dignified and accessible housing for our citizens,” Nabakooba said.
She noted that mortgage penetration in Uganda remains extremely low, accounting for less than one per cent of the country’s Gross Domestic Product (GDP), with fewer than 40,000 active mortgages serving a population of about 45 million people.
Nabakooba added the limited access to mortgage financing has contributed to a situation where about 60 per cent of Ugandans live in inadequate or informal housing.
According to Nabakooba, the major obstacles affecting mortgage growth include high interest rates, complicated land ownership structures, informal employment and the mismatch between short-term bank deposits and long-term mortgage financing.
“Bank mortgage rates typically range between 17 and 24 per cent per annum, making long-term borrowing extremely expensive for many Ugandans,” she said.
She added that disputed land ownership and challenges in verifying income among informal sector workers have also limited access to housing finance.
Nabakooba said government is implementing reforms aimed at creating a more affordable and sustainable mortgage market.
She highlighted the Mortgage Refinance Institutions Act as a key intervention that will allow mortgage refinance institutions to access long-term capital through corporate bonds, enabling commercial banks to offer more affordable mortgage products.
“This framework will provide commercial lenders with patient capital, address the maturity mismatch challenge and create an avenue for reducing mortgage rates towards single digits,” she said.
The minister also pointed to the Valuation Act as another reform aimed at improving transparency in Uganda’s property market by standardising property valuations and reducing artificially inflated prices that increase transaction costs.
She said the Ministry of Lands is also accelerating digitisation of land registration systems to simplify property searches, reduce fraud and speed up mortgage processing.
“We are working towards creating a system where banks can directly interact with our land information systems to verify property details and process mortgages faster,” Nabakooba said.
She added that government is developing frameworks to address challenges surrounding customary land ownership to unlock land as a productive asset that can be used as collateral.
Nabakooba said government alone cannot solve Uganda’s housing challenge and called for stronger collaboration with financial institutions, developers and investors.
She said government’s role will focus on providing essential infrastructure such as roads, water, electricity and sewerage systems to support large-scale housing developments, while private developers concentrate on affordable and vertical housing projects.
Uganda’s rapid urbanisation rate, estimated at 5.2 per cent annually, has increased pressure on housing supply, especially in cities and emerging urban centres.
She encouraged banks to expand mortgage products beyond formal employees and design solutions targeting informal sector workers, including traders, women and young entrepreneurs who contribute significantly to the economy.
“Do not focus only on the top five per cent of the formal sector. Develop products that recognise cash flows among informal sector players who also aspire to own homes,” Nabakooba urged.
Diamond Trust Bank Managing Director, Godfrey Ssebaana said the new mortgage products are designed to provide long-term and affordable financing to enable more Ugandans acquire homes while supporting developers to increase housing supply.
He identified limited access to patient capital as one of the biggest challenges affecting Uganda’s housing sector.
“To solve this problem, we realised that we really need patient capital. For a salaried person to own a home, it can only be achieved over a reasonable number of years,” Ssebaana said.
He said DTB’s decision to enter the mortgage market was driven by the need to address a national challenge rather than simply introduce another banking product.
“We are not only here to launch a mortgage product; we are here to solve a housing problem,” he said.
According to the bank, the mortgage facilities will allow customers to acquire homes through repayment periods of up to 20 years, with interest rates ranging between 15 per cent and 20 per cent depending on the borrower’s risk profile.
He said the financing structure was designed to make home ownership achievable for Ugandans while balancing affordability and sustainability for the bank.
“For us to put up a financing solution where you can service a product for 20 years, we have to ensure that the capital we are availing is affordable and does not make it difficult for people to achieve their dreams,” he said.
The DTB chief said Uganda’s housing challenge goes beyond the shortage of physical houses, noting that limited access to affordable long-term financing remains a major barrier to home ownership.
According to Godfrey Lule, the Sales and Marketing Director at Bakaima Real Estates, the company has partnered with various building materials manufacturers to provide affordable solutions that will enable more Ugandans to construct homes.
“We have established partnerships with manufacturers of clay products, cement and other building materials. Through our online hardware platform, Ugandans can open accounts and save over a given period to finance their construction projects. For instance, someone can save for a year and accumulate enough funds to purchase building materials,” Lule said.
He explained that the initiative is aimed at helping Ugandans who may not have immediate access to large sums of money for land acquisition or construction costs.
"By allowing individuals to save gradually, we provide a more accessible pathway to home ownership and construction,the sales and marketing director at Bakaima Real Estates said.
