Mortgage refinancing institutions will now be required to have minimum paid-up capital of Shs35 billion.
This is contained in the Mortgage Refinancing Institutions Bill, 2025 that was passed during plenary sitting on Thursday, 04 September 2025.
Presenting the report of the Committee on Finance, Planning and Economic Development, Hon. Amos Kankunda, said that the Shs35 billion compares well with other countries in the region.
“About Shs27.7 billion, Shs24.9 billion and Shs41 billion for Kenya, Rwanda and Tanzania, respectively,” said Kankunda during the sitting chaired by Speaker Anita Among.
The law also states that the minimum capital fund requirements for mortgage refinance institutions unimpaired by losses shall, always, not be less than the minimum paid-up capital (Shs35 billion).
“The provision also allows the Central Bank, by statutory instrument, to revise the minimum paid up capital,” read the committee’s report in part.
The new law mandates Bank of Uganda to regulate mortgage refinancing institutions.
The law further provides for a fully-fledged Islamic mortgage refinance institution, wherein, this is defined a licensed Islamic mortgage refinance business conducted in accordance with sharia law.
The law also mandates the Central Bank to revoke the licence of a mortgage refinance business within 12 months from the date of issue of the licence, if satisfied that the licencee obtained the licence fraudulently or through misrepresentation.
“The Mortgage Refinance Institutions Bill, 2025 will help solve the problem of loan mismatch where financial institutions use short-term deposits by customers to lend to mortgagors,” Kankunda said.
Adding,” The Central Bank in consultation with the Minister should cap interest rates on mortgages under mortgage refinancing arrangement.”
The law will require mortgage refinance institutions to provide long-term funding to primary mortgage lenders by re-financing or pre-financing mortgage portfolios for an extended period of at least five years.
Mortgage refinance institutions refinance primary mortgage lenders, and the law prohibits Mortgage Refinance Institutions from offering credit facilities to any other person other than primary mortgage lenders that are in good standing.
The Minister of State for Finance, Planning and Economic Development (General Duties), Hon. Henry Musasizi, said that the law will provide stable long-term capital for mortgage lending.
“The key objectives include enabling primary lenders to offer long term tenures and low interest rates and ultimately making home ownership more accessible particularly to middle and low-income earners,” Musasizi said.
