Purpose – The purpose of this research is to investigate the unaffordability of housing and limited access to finance as limiting factors to the provision of adequate housing in the urban areas of Malawi.
Design/methodology/approach – Primary data were collected by means of questionnaires followed up by semi-structured personal interviews. These interviews were conducted with all major role players in the urban housing finance industry. Secondary data were obtained through scrutiny of the stakeholders' relevant official records and reports kept at their offices. The subset of analysis was chosen to be the local authorities of Blantyre, Zomba, Lilongwe and Mzuzu.
Findings – Finance from the formal sector is accessible to fewer than 35 per cent of the urban population and less than 16 per cent of households in the major urban areas can afford an average house. No government subsidies are available for end users and development financing is limited and extremely dear. The contribution from non-conventional finance sources to housing finance is negligible.
Practical implications – It is suggested that the use of various instruments may alleviate the situation. Such instruments could include a housing tax for the implementation of subsidies, subsidies from developed countries, the formation of cooperatives and the implementation of securitisation.
Originality/value – Limited research exists on the problem of housing finance in Malawi. This paper quantifies the situation. Implementation of the recommendations will contribute to the provision of adequate housing in Malawi.