Assessing the extent to which poor credit cultures limit financing of affordable housing in Uganda.
Abstract
This study assessed the extent to which poor credit cultures limit financing of affordable housing in
Uganda. There are many types of poor credit cultures but this study mainly focuses on two which
include poor credit information systems and rigorous length scrutiny of borrowers.
The objectives of this study were; to identify the various forms of poor credit cultures, to investigate
the concept of housing with an emphasis on affordable housing and to establish the relationship
between poor credit cultures and financing of affordable housing.
To achieve these objectives, a structured questionnaire was used to collect quantitative data. The
questionnaire was designed in line with the study objectives and research questions were delivered
to the respondents. Both open and closed questions were used in the questionnaire.
This research mainly focused on commercial banks. A commercial bank can be defined as a financial
institution that takes in deposits from the general public and then grants loans for the roles of
investment and consumption in order to make profit from interest rates charged.
This research revealed that there is a strong relationship between poor credit cultures and limited
financing of affordable housing. The recommendations included the government putting in place an
efficient credit information system to broaden the information that credit institutions in Uganda use
in the credit-risk assessment of potential borrowers. The government should work hand-in-hand with
the various financial intermediaries in the country to come up with policies that stabilize the level of
rigorousness in scrutinizing borrowers of housing loans.