The Government has taken a significant step towards reforming Uganda’s housing finance sector with the tabling of the Mortgage Refinance Institutions Bill, 2025, aimed at regulating the establishment and operation of mortgage refinance institutions.
On Thursday, the Minister of State for General Duties in the Ministry of Finance, Planning and Economic Development, Hon. Henry Musasizi, appeared before the Parliamentary Committee on Finance, Planning and Economic Development, accompanied by technical teams from the Bank of Uganda and the Ministry of Finance to present the Bill.
According to Minister Musasizi, the proposed legislation seeks to address the longstanding challenge of loan mismatches in the housing finance sector, where banks and financial institutions use short-term customer deposits to finance long-term mortgage loans.
“I want to thank you and request you to consider the Mortgage Refinance Institutions Bill, 2025, which will help in solving the problem of loan mismatch, where financial institutions use short-term deposits to lend to mortgage borrowers,” Minister Musasizi told the committee.
Why the Bill Matters:
At present, Uganda has no legal framework governing mortgage refinance institutions, entities that provide long-term funding to mortgage lenders, thereby enhancing liquidity and reducing pressure on primary lenders such as banks and microfinance deposit-taking institutions.
The Bill outlines provisions for the licensing, regulation, and supervision of these institutions, with the Bank of Uganda designated as the regulator responsible for overseeing their operations.
One of the key highlights of the Bill is the minimum capital requirement of Shs 35 billion for any entity seeking to establish a mortgage refinance institution in Uganda.
Boosting Housing Finance:
Mortgage refinance institutions play a crucial role in making housing finance more accessible and affordable by enabling financial institutions to offer long-term loans at lower interest rates.
In the absence of a refinancing mechanism, most Ugandan mortgage lenders depend on unstable short-term financing, which increases risk and limits the availability of home loans.
If passed, the Bill is expected to lay a strong foundation for the development of a more stable and sustainable mortgage market in Uganda.
Next Steps:
The committee is expected to scrutinize the Bill in detail before presenting it to Parliament for further debate and enactment. Stakeholders in the housing and banking sectors have welcomed the move, saying it could pave the way for more inclusive housing financing opportunities across the country.
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