The world is witnessing unprecedented levels of urbanisation. UN-HABITAT (2009) predicted that two thirds of the world’s population will be living in cities and towns by 2030. Cities in developing countries are the fastest growing. However, the most worrying phenomena have been the rapid growth of slums in and around some cities coupled with acute shortages of housing in many others. In 2004, the U.N reported that more than a billion people in developing countries live in slums, a figure expected to double over the next 30 years. Developing countries continue to grapple with challenges of providing housing to their communities. Investment and new development in housing remain low and slow. The major problem has been lack of finance and investment towards housing.

This paper will discuss Zimbabwe’s finance industry particularly the banking sector and the extent to which it has committed resources towards housing. The paper will also discuss the challenges faced by the banking sector over the years. The banking industry is a major player in every country’s economy and it influences the growth and prosperity of a nation.

In discussing Zimbabwe’s housing finance, the paper will look at both domestic and foreign sources of finance, their volumes and the factors which influence their deployment. The paper is an extract from a broader ongoing Ph.D. research study whose main aim is to investigate why Zimbabwe is failing to provide adequate housing in the context of both private investment and public housing. In the study, it is found that housing finance in Zimbabwe is not adequate and falls far short of the levels required to effectively address the shortage of housing.