as serving as a potent hedge against inflation. for the broader economy, there are benefits in terms of a continuous build - up of the volume and variety of stock of housing, alongside growth in the population and incomes. potentially, this could also have significant distributional effects and, if housing credit is more inclusive, it can reduce income inequality. furthermore, developed economies, with well - functioning financial systems, such as the united states of america, attest to the fact that citizens can access, in a disciplined and beneficial manner, the so - called “ excess equity ” in their mortgaged properties and use their houses as atms! moreover, with unconstrained growth in mortgage finance and housing, there are incidental economic opportunities relating to the construction industry and related services, thus contributing to economic diversification. distinguished guests, the second point is that such prospects, however, need support in terms of a land tenure policy that facilitates the use of the various forms of land and real estate across the country to secure mortgage financing. this helps in terms of both financing and marketability of land and property countrywide, with the attendant economic opportunities. therefore, the administration, improvement of land procedures and systems ( lapcas ) project, that should ease constraints to using land acquired under different tenures as collateral for mortgages, is a welcome development. in this regard, it is our expectation that bbs and, of course other financial institutions in this country, will respond positively in providing affordable credit that the average household in botswana can access. the third dimension, distinguished ladies and gentlemen, is that the supporting services need to be robust and sound. among others, this relates to professionalism around property valuations to ensure that the resultant loan financing is aligned to housing market realities ; thus safeguarding the interests of both the financier and the customer ; respectively, as well as the soundness of financial institutions and welfare of households. going forward, the development of a credible property price index and enhancement of sharing of credit information through well - organised credit bureaux would be helpful. therefore, we agree with the observation made by the centre for affordable housing finance in africa, in their 9th edition of the housing finance yearbook, that “ a combination of a good macroeconomic environment, sound policy, better data and increased access to affordable credit ” should spur the development of a vibrant housing market to the benefit of a large segment of the population. fourth, appropriately structured resource mobilisation is key to successful provision of housing finance

and related services. given that housing finance is inherently long - term in nature and that there is an imperative for further growth in botswana, it should be supported by a large pool of stable deposits and / or investments. this is afforded by attracting a range of small to large deposits, with associated transactional and return incentives. the point here is that active deposit mobilisation is critical for availing funds that can be deployed to support housing finance without undermining the viability of the financial institution. in addition, a robust capital market that facilitates seamless raising of long - term funds, including corporate bonds to suit various needs, is also needed. it is accepted that, as a matter of prudence, we should not burden short - term finance or worsen the structural maturity mismatches widely prevalent in the country ’ s financial system. moreover, there is a need to invest in capacity to develop derivative instruments that facilitate risk sharing, as well as transformation and trading of assets and liabilities ; thus alleviate constraints to mortgage financing. regrettably, in this regard, the botswana financial system is way behind the curve and, despite banking industry outcry about tight market liquidity in recent years, there is not much evidence of any innovative and structured products, such as mortgage - backed securities, negotiable certificates of deposit or credit default swaps. for its part, the bank of botswana has entrenched a largely credible monetary policy framework, with inflation sustained within the objective range of 3 – 6 percent and allowing for maintenance of relatively low interest rates. furthermore, effective regulatory oversight and prudently managed financial institutions continue to contribute to maintenance of a sound and stable financial system. in this regard, well - anchored expectations, premised on a credible policy framework, supports determination of term structure of interest rates, relevant for both resource mobilisation and pricing of long - term loans. the policy environment is, therefore, conducive for orderly and effective intermediation and productive use of financial resources ; and in the context of the theme of my message today, affordable cost of housing finance. distinguished guests, the fifth point, i want to highlight is the importance of presence of institutions and access to services, as demonstrated by the opening of the palapye branch of botswana building society. geographical spread of financial institutions allows for proximate access to financial services, in terms of both acquaintance and usage. this augurs well for financial inclusion. thus, when people know about the