Speaking on Tuesday at a breakfast forum organised by the asset manager and FinMark Trust, Senye said that in developed countries the developed mortgage industry has evolved in a way that provides housing finance for the majority.
He was concerned that in Botswana few people save sufficient money to pay cash upfront for housing. Senye said that this is compounded by the fact that people are restricted to rented accommodation without the potential to acquire their own property, which in turn excludes them from a potentially important form of wealth accumulation.
The mortgage institutions include banks as well as more specialized institutions such as building societies.
"In developing countries, this structure may not be sufficient. Banks and building societies do provide housing finance, but the nature of their products and lending criteria may restrict their conventional applicability to those on relatively high, regular incomes", he said.
In the case of Botswana, this would only to a minority of the population, adding that most people in Botswana and elsewhere in Africa tend to acquire or build houses on a more informal basis - often building one room at a time, which, combined with low and irregular incomes does not fit well with conventional housing finance products.
Senye called for innovative solutions to ensure that the majority of the population have potential access to housing finance.
The Breakfast Forum covered housing financial related issues. As the latest in a series of similar events, the Forum is designed to facilitate discussions among stakeholders on relevant issues relating to access to banking and financial services.
The Forum highlighted issues on micro finance and housing, access to banking services and banking, pension and commercial bank assets, conventional housing finance, among several others.
The Forum participants were informed that the micro lending sector is growing rapidly in Botswana, adding that access to affordable land is a major obstacle to ownership and that the number of land valuers has risen drastically. Senye said: "Early Forums dealt with mostly issues around banking, including the extent of access to banking, bank charges, the impact of new technology on access to banking, and the potential of low cost bank accounts. The most recent Forum, held about three months ago, moved beyond banking to cover the potential for low cost pension and insurance products. He explained that the overriding theme for these events has been how to improve the functioning of the financial sector, both the banking system and financial institutions and markets, more broadly, to provide useful products and services to a larger proportion of the population.
Senye said that access to housing is an essential component of basic living conditions and the quality of life, adding that financial institutions and markets have an important role to play in ensuring that housing is not expensive relative to incomes.
Senye said: "We see ourselves as having a wider public interest and public education role, which involves providing an environment for greater understanding of financial and economic development issues - pushing public debate forward especially with a policy focus". The Forum presenters looked at the results of work done on surveying literature and research on housing finance through sub-Saharan Africa as well as on work that has been done on facilitating housing finance through the provision of loan guarantees. The other presentation highlighted the results of work that has been done on an overview of housing finance provision in Botswana, exposing issues that have arisen in improving such access, among other pertinent issues.
