Housing Finance - the Case of Botswana.

Abstract: Housing finance plays an important role in shaping a country’s wider housing system and services the stability and effectiveness of the financial system, promoting social stability and economic development. This thesis explores the housing finance sector in Botswana by distinguishing necessary conditions and possible bottlenecks to development of an efficient market, as well as providing possible solutions. Stable macroeconomic conditions, a legal framework for property rights, a functioning property market, mortgage market infrastructure and funding mechanisms are five preconditions which have been used to evaluate the market. The necessary data was collected during a minor field study in Botswana. The analysis shows that there are inefficiencies in all five preconditions, where the high level of inflation, the complicated land tenure and administration system and the small size and lack of competition of the banking sector in Botswana were the main impediments to housing finance development. The appropriate role of government interventions should be as a facilitator by improving the functioning of the housing finance markets, rather than direct provision.