2009年-世界发展银行全球_Expanding_Housing_Finance_in_Uganda___Task_2_Study_to_Examine_the_Use_of_Retail_Funds_for_Mortgage_Lending_63页_1mb

G:ENESIS - Task 2 Summary: Expanding Housing Finance in Uganda

Overview of the Study

This report is part of a FIRST Initiative-funded study aimed at expanding access to housing finance in Uganda, particularly for modest and lower income households. The study includes two complementary tasks:

• Task 1: Feasibility study for pilot housing finance schemes targeting low and modest income households.
• Task 2: Analysis of the use of retail funds for mortgage lending, focusing on the financial and banking sector context, liquidity and liquidity management, and potential funding structures.

The report is authored by Genesis Analytics (Pty) Ltd and supported by the Urban Institute, UN-Habitat, the World Bank, and the IFC's Uganda Primary Mortgage Market Initiative (UPMMI).

Key Findings

Macroeconomic Conditions

• Mortgage lending rates are above 15%, which has depressed demand and made renting more attractive.
• The gap between savings rates and inflation discourages formal savings and encourages incremental construction instead.
• Nominal GDP has more than doubled since 2000, with an average growth rate of 8%, but growth forecasts have declined due to shrinking export demand, lack of cheap capital, and falling commodity prices.
• Inflation has remained within the single-digit bracket since the 1990s, but reached 12% in 2008 due to rising international and domestic prices.

Demand for Housing Finance

• Only 1% of Ugandan households can afford formal mortgage products due to stringent loan criteria.
• Incremental construction is a more viable savings option than formal financial savings.
• Demand for mortgages is constrained by limited supply of affordable housing.
• Home improvement loans are more suitable for expanding access to housing finance among low-income households.

Supply of Housing Finance

• The housing finance market is dominated by a small number of players, limiting competition and innovation.
• Over 50% of mortgage finance comes from the Housing Finance Bank (HFB), which is externally funded.
• Loan to deposit ratios are increasing, suggesting a potential future shortage of deposits in the formal financial system.
• Mortgage lending margins are narrow, as they are only slightly above short-term government securities.
• Core deposits are inconsistently calculated across banks, and smaller banks face liquidity constraints.

Alternative Sources of Term Funding

• Insurance companies and traditional non-bank institutions (e.g., NSSF) are limited by balance sheet and investment constraints.
• Securitisation is not viable in the near future due to underdeveloped capital markets and lack of legal frameworks.

Regulatory Issues

• The Bank of Uganda (BOU) provides insufficient guidelines on core deposit calculations and does not mandate stress testing or contingency planning.
• Mortgage loans are 100% risk-weighted, despite Basel I requirements of 50%.
• MDIs are restricted to two-year loans, limiting their ability to serve lower-income groups.

Summary of Recommendations

Recommendations for External Funding Structure

• Introduce an external funding structure in the medium term to address liquidity constraints of smaller banks and MDIs.
• A liquidity facility is recommended as the most suitable format, due to its:
  • Success in other emerging markets (e.g., Malaysia, Jordan).
  • Ability to introduce state guarantees without exposing the state to moral hazard.
  • Potential to increase competition and mortgage lending capacity.
• The scale of the fund may be insufficient to cover initial overheads, requiring government subsidies.
• A thorough business case and financial model should be developed before implementing the facility.

Recommendations for Regulatory Modifications

• BOU should provide clearer guidelines on reclassifying demand deposits to core deposits.
• Reduce risk weight for private dwelling mortgages to 50%, in line with Basel I requirements.
• Require banks to report mortgage loans separately, distinguishing between local and foreign currency.
• Relax term length restrictions on MDI loans, provided they demonstrate sufficient term funds and adequate ALCO processes.

Funding Strategies

• Retail sector:
  • Savings linked to housing finance can be leveraged to increase term funding.
  • Deposit insurance should be considered to enhance confidence in the formal financial system.
• Wholesale sector:
  • Term funding and securitisation are potential options, but securitisation is not feasible in the short term.
  • A liquidity backstop/facility is proposed to support smaller banks and MDIs.

Policy and Regulatory Issues

• The regulatory environment needs to be reformed to support affordable housing finance.
• Liquidity management is critical, especially for smaller institutions.
• Legal frameworks must be developed to support securitisation and state guarantees.
• Competition in the housing finance market is limited, and regulatory reforms are needed to encourage price and product competition.
• Risk management capabilities of lending institutions need to be strengthened to manage mortgage portfolios and core deposits effectively.

Conclusion

This report highlights the challenges and opportunities in expanding housing finance in Uganda, particularly for low and modest income households. It emphasizes the need for regulatory reforms, improved liquidity management, and new funding structures such as liquidity facilities. The recommendations are market-based, aiming to enhance sustainability and avoid reliance on subsidies or donor funds. The Task 2 report serves as a foundation for Task 1, which focuses on the design and implementation of pilot projects.