IDEAS home Printed from https://ideas.repec.org/p/afr/wpaper/afres2018_153.html
   My bibliography  Save this paper

The Feasibility of Secondary Mortgage Markets (Smm) in Rapidly Developing African Economies: The Case of Rwanda

Author

Listed:
  • A. Bismark
  • M. Asinyaka
  • C. Umugwaneza
  • R. Mugisha

Abstract

In this paper, we consider the viability of a Secondary Mortgage Market (SMM) in Rwanda and its potential to ensure sustainable access to housing finance, taking cognizance of the economic and institutional transformations witnessed over the last two decades. We do so by exploiting primary and secondary data, utilizing structured questionnaires and interviews to obtain information from commercial banks, the National Bank of Rwanda, Development Bank of Rwanda and the Capital Market Authority.The findings reveal that the mortgage market in Rwanda is burgeoning rapidly. We observed, in the primary mortgage market, a high willingness on the part of banks to grant mortgage loans, albeit, they are constrained by lack of access to long-term funding and limited risk-bearing capacity. The macro-economic environment was evaluated with regard to the pre-requisites of a viable SMM and was found to be robust to support an SMM. Further, the Rwanda capital market is adequately prepared for Mortgage Backed Securities (MBS) with a well-founded regulation for asset-backed securities in place and high discipline in the market. The study reveals that the securities of many reputable companies on the Rwanda Stock Exchange (RSE) are currently over-subscribed suggesting a high potential demand for new, innovative securities. Finally, we observe that the legal and regulatory framework is strong enough to support an SMM. The mortgage law, foreclosure procedures and systematic land title registration, promise adequate title security to collateralised properties. In light of these observations, we submit that there is a reasonably high prospect that an SMM would be a success in Rwanda.

Suggested Citation

  • A. Bismark & M. Asinyaka & C. Umugwaneza & R. Mugisha, 2018. "The Feasibility of Secondary Mortgage Markets (Smm) in Rapidly Developing African Economies: The Case of Rwanda," AfRES afres2018_153, African Real Estate Society (AfRES).
  • Handle: RePEc:afr:wpaper:afres2018_153
    as

    Download full text from publisher

    File URL: https://afres.architexturez.net/doc/oai-afres-id-afres2018-153
    Download Restriction: no

    More about this item

    Keywords

    Developing Economies; housing; Mortgage Finance; Rwanda; secondary mortgage market;

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:afr:wpaper:afres2018_153. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Architexturez Imprints). General contact details of provider: http://edirc.repec.org/data/afresea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.