Bank of Uganda’s move to limit loans exposure to real estate gets mixed reactions from sector players

In a bid to limit over exposure to the real estate sector amidst what the central bank calls a potential “double-digit decline in real estate valuations” Bank of Uganda, last week, directed all lenders under its jurisdiction to limit their Loan to Value Ratio (LTV), for residential mortgages and loans for land purchase to a maximum 85 per cent. In a June 1st circular to CEOs of all Commercial Banks, Credit Institutions and Deposit-taking Institutions under the ambit of the regulator, Dr. Tumubweine Twinemanzi, BoU’s Executive Director, Supervision told the financial institutions that “current projections and market intelligence indicate that…