Uganda unveils landmark bill to regulate mortgage refinance, tackle loan mismatch
Currently, there is no law governing the establishment and operations of mortgage refinance institutions in the country.
Ugandan government today took a significant step towards stabilizing and expanding its housing finance sector with the presentation of the Mortgage Refinance Institutions Bill, 2025, to Parliament’s Committee on Finance, Planning and Economic Development.
Minister of State for General Duties, Henry Musasizi, accompanied by technical teams from the Bank of Uganda (BOU) and the Ministry of Finance, spearheaded the presentation of the proposed legislation. The Bill aims to establish a comprehensive regulatory framework for mortgage refinance institutions, a crucial segment of the financial sector currently operating without specific legal oversight in Uganda.
Currently, there is no law governing the establishment and operations of mortgage refinance institutions in the country. These institutions play a vital role in injecting liquidity into financial institutions and microfinance deposit-taking institutions, thereby enabling them to issue long-term mortgages.
Hon. Musasizi highlighted the pressing need for the Bill, explaining that primary mortgage lenders in Uganda predominantly rely on short-term customer deposits and other short-term borrowings to finance their long-term mortgage portfolios. This practice creates a significant “loan mismatch” problem, exposing lenders to liquidity risks and limiting their capacity to offer sustainable long-term housing 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 urged the committee.
Beyond regulating the establishment of these institutions, the Bill also explicitly provides for the functions of the Central Bank (Bank of Uganda) to conduct mortgage refinance business, further strengthening the stability and capacity of the market.
Among its key provisions, the Mortgage Refinance Institutions Bill, 2025, prescribes a minimum capital requirement of UGX 35 billion for any entity seeking to establish a mortgage refinance institution in Uganda. This substantial capital floor is intended to ensure the stability and robustness of new entrants into the market.
The enactment of this Bill is expected to foster a more predictable and liquid mortgage market, encourage the issuance of more long-term and affordable housing loans, and ultimately contribute to increased homeownership across the country. The parliamentary committee will now deliberate on the provisions of the Bill before it proceeds through the legislative process.
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