Developing a framework towards increased mortgage financing in Zimbabwe's property market: a case of National Building Society (NBS) Zimbabwe

Abstract

Zimbabwe faces an acute housing finance crisis characterized by a significant housing deficit, low mortgage market penetration, and limited access to affordable mortgage financing. National Building Society (NBS) Zimbabwe, the country’s primary dedicated mortgage lender, operates within a challenging environment marked by funding constraints, affordability challenges, institutional inefficiencies, regulatory limitations, and macroeconomic instability. These challenges have constrained the growth of mortgage financing and limited access to formal home ownership for a substantial proportion of Zimbabwean households. The purpose of this research was to develop an integrated, evidence-based framework for increasing mortgage financing penetration in Zimbabwe’s property market, using NBS Zimbabwe as a case study. The study was guided by Financial Intermediation Theory, Credit Rationing Theory, Institutional Theory, and the Affordability Theory of Housing Finance. A sequential explanatory mixed-methods research design was adopted. Quantitative data were collected through structured questionnaires administered to NBS mortgage clients and prospective borrowers, while qualitative data were gathered through semi-structured interviews with NBS management, mortgage officers, regulators, and property sector stakeholders. Quantitative data were analyzed using descriptive and inferential statistical techniques, while qualitative data were analyzed using thematic analysis. The findings revealed that high interest rates, limited access to long-term funding, widespread income informality, weak land tenure systems, inadequate credit information infrastructure, and persistent macroeconomic instability constitute the major barriers to mortgage financing expansion. The study further established that affordability constraints and stringent mortgage qualification requirements significantly reduce mortgage uptake among potential borrowers. In addition, the absence of a government-backed mortgage refinancing facility limits NBS Zimbabwe’s ability to mobilize affordable long-term capital for mortgage lending. The research developed an integrated framework centered on four strategic pillars: structural capital mobilization through a National Mortgage Refinance Company, innovative and inclusive mortgage product development, institutional and regulatory reforms, and enhanced financial literacy and customer engagement initiatives. The study concludes that meaningful expansion of mortgage financing in Zimbabwe requires a coordinated multi-stakeholder approach that simultaneously addresses supply-side, demand-side, institutional, regulatory, and macroeconomic challenges. The proposed framework provides practical guidance for NBS Zimbabwe, policymakers, regulators, and other stakeholders seeking to improve access to affordable housing finance and promote sustainable home ownership in Zimbabwe.