Overview:
The proposed legislation seeks to address a longstanding regulatory gap — Uganda currently lacks a specific law governing the operations of mortgage refinance institutions.
In a landmark move to strengthen the country’s housing finance system, the Government of Uganda has introduced the Mortgage Refinance Institutions Bill, 2025, aimed at establishing a clear legal and regulatory framework for mortgage refinance institutions.
The Bill was formally presented to Parliament on Thursday by the Minister of State for General Duties, Hon. Henry Musasizi, accompanied by a technical delegation from the Bank of Uganda (BoU) and the Ministry of Finance, Planning and Economic Development (MoFPED).
The proposed legislation seeks to address a longstanding regulatory gap — Uganda currently lacks a specific law governing the operations of mortgage refinance institutions. These institutions serve as a vital source of long-term funding for banks and microfinance deposit-taking institutions (MDIs), enabling them to issue more affordable and sustainable 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,” Hon. Musasizi told members of the Parliamentary Committee on Finance, Planning and Economic Development.
At present, primary mortgage lenders in Uganda rely heavily on customer deposits and short-term borrowing to finance mortgage products. This results in a loan tenor mismatch, where long-term mortgage obligations are backed by short-term liabilities, creating systemic risk and limiting the expansion of affordable housing finance.
The new Bill aims to formalize the mortgage refinance market by:
- Regulating the establishment and licensing of mortgage refinance institutions.
- Empowering the Bank of Uganda to supervise and regulate mortgage refinance operations.
- Prescribing a minimum capital requirement of UGX 35 billion for any entity seeking to establish a mortgage refinance institution.
- Defining operational and governance standards to ensure stability and transparency in the sector.
According to BoU officials who accompanied the Minister, the Bill is expected to lay the groundwork for a more robust mortgage finance ecosystem, helping Uganda move toward broader financial inclusion and a more vibrant housing sector.
Once enacted, the legislation will provide mortgage lenders with access to more stable sources of long-term capital, ultimately allowing them to offer longer loan tenures and lower interest rates to borrowers. This could open the door to increased homeownership among Ugandans, particularly in the middle- and lower-income segments.
The Bill comes at a time when housing demand in Uganda is on the rise, driven by rapid urbanization and population growth. Yet access to long-term mortgage finance remains limited, with most banks hesitant to commit large amounts of capital over extended periods without reliable refinancing options.
With parliamentary scrutiny underway, stakeholders are hopeful the Mortgage Refinance Institutions Bill, 2025 will be passed into law in time to unlock Uganda’s untapped mortgage market and support the country’s broader development goals.