The Bank of Uganda will regulate mortgage refinancing institutions once the Mortgage Refinance Institutions Bill, 2025, is passed. The Bill gives the Central Bank authority to approve both conventional and Islamic mortgage refinance businesses.
Currently, there is no law governing mortgage refinance institutions in Uganda, which play a key role in providing liquidity for long-term mortgages. The Bill aims to address the issue of primary mortgage lenders relying on short-term funding, causing maturity mismatches. It mandates mortgage refinance institutions to offer long-term funding for at least five years to help reduce interest rates, extend repayment durations, and improve affordability for borrowers.
The Bill also enforces strict penalties for non-compliance, including fines and jail terms for those operating without a license. Mortgage refinance institutions will only be allowed to work with primary mortgage lenders in good standing.
The Committee on Finance, Planning, and Economic Development will review the Bill and report back within 45 days.
