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Housing and sustainable urbanisation formed a crucial part of our National Development Plan. How is the Housing Finance Bank supporting this initiative?
Housing Finance Bank has been a leader in mortgage provision for 57 years, consistently strengthening our position in this space. We recognise that housing is a crucial element of the National Development Plan and aims to contribute immensely to a higher household income and employment for sustainable socio-economic transformation. We have contributed over UGX60bn in dividends and UGX51bn in taxes, financed over 7,500 homes, financed over 8,400 women-led businesses, launched a Microfinance unit to increase financial inclusion, partnered with over 3,700 SACCOs and extended over UGX103bn in financing to the agriculture sector.
Our goal is to ensure a sustainable future for all. By spearheading several new initiatives, we are future-proofing the Bank for generations to come.
One of our key innovations is the Zimba Mpola Mpola product, which is designed to address the incremental building needs of many Ugandans. This solution allows customers to access sizeable financing that aligns with their income, making affordable housing more accessible. The response to Zimba Mpola Mpola has been very positive, with significant customer interest.
Additionally, we are committed to inclusivity, especially for women and youth who have traditionally been excluded. Our partnerships with funders such as the European Investment Bank (EIB), Uganda Energy Credit Capitalisation Company (UECCC), and the French Development Agency (AFD) support these initiatives. We are also working closely with the government to enhance credit accessibility.
You have a unique flagship product of Zimba Mpola Mpola (incremental housing loans) which targets ordinary Ugandans. What was the purpose of creating this unique product?
The purpose of creating Zimba Mpola Mpola is to address Uganda’s pressing need for affordable housing due to the country’s rapidly growing population and high urbanisation rate.
With an urbanisation rate of 5.2%, one of the highest in Africa, the demand for housing is increasing significantly. This surge in demand is compounded by a substantial housing deficit, currently exceeding 2.4 million units and growing by 200,000 units annually.
Zimba Mpola Mpola aims to tackle this deficit by providing a flexible solution that allows individuals to build their homes incrementally, thus making homeownership more accessible and affordable. The product also integrates sustainability practices, reflecting a growing awareness of climate-friendly housing solutions.
What key trends and developments in the housing sector should investors be aware of?
There are several key trends and developments in the housing sector that investors should be aware of. Uganda’s growing population, coupled with a high urbanisation rate of approximately 5.2%, is driving increased demand for more housing. This urbanisation is leading to the development of new cities and neighbourhoods, which necessitates a substantial increase in housing supply.
There is a significant deficit in affordable housing, with a current shortfall of over 2.4 million units, growing by about 200,000 units annually. Addressing this deficit presents a critical opportunity for investment, particularly in the affordable housing space.
Sustainability is also becoming a crucial factor. There is a growing interest in sustainable construction practices, including the use of eco-friendly materials and energy-efficient designs.
Technology innovation is another significant trend. Technology is playing an increasingly important role in the housing sector, and digital platforms are being used for property search, financing, and management.
Government involvement and support are critical. Beyond setting a clear policy, the Government is actively promoting public–private partnerships to accelerate housing development and leverage private-sector investment. This is all aimed at improving the efficiency and transparency of the housing sector.
Lastly, investors are increasingly focusing on condominium apartments as a viable solution. These developments provide efficient use of space and offer a good return on investment.
Housing Finance Bank is one of the few state-owned enterprises that are profit-making. What are the key factors behind this success?
Housing Finance Bankhas consistently demonstrated strong performance over several years. Its success can be attributed to several key factors.
The Bank’s strategic focus and niche market have been pivotal in painting its success story. The Bank has maintained a dominant position in the Ugandan housing finance market capturing a significant position of the market share.
Equity Bank Unveils Revolutionary Digital Savings ProductHousing Finance Bank has a strong leadership and corporate culture. The Bank’s leadership Team has demonstrated strong strategic vision and effective execution. The Bank has a strong governance framework ensuring accountability and effective management. A positive corporate culture that has fostered employee engagement and productivity.
The Bank has strong shareholders, including the Government, the National Social Security Fund (NSSF), and the National Housing and Construction Company (NHCC), whose support has enabled the Bank to register commendable growth and success. The Bank is collaborating with the Government through various programs, such as the Parish Development Model (PDM), Emyooga, and Women and Youth, to positively impact Ugandans of all walks of life.
The Bank’s commitment to customer service stands out. Its focus on providing a positive banking experience through its digital channels and wide branch network has resulted in high retention and growth.
What policies and interventions do you think the Government needs to address Uganda’s housing deficit of more than 2.4 million units?
To address Uganda’s housing deficit, we must foster public-private partnerships that will result in more viable housing interventions.
Providing financial incentives to developers can encourage the creation of scalable and affordable housing solutions. Additionally, enhancing infrastructure such as roads, water, and electricity can significantly reduce housing costs and make it more accessible.
Establishing or enhancing mortgage liquidity facilities can improve access to long-term funding, allowing banks to offer more affordable mortgage options. Increasing financial literacy regarding mortgage finance and promoting financial inclusion can help more people understand and access housing loans.
Supporting green financing initiatives can attract funds for sustainable housing projects, addressing housing needs while promoting environmental sustainability.
Where do you see Housing Finance Bank in the next five to 10 years?
Given its strong performance and strategic focus, Housing Finance Bank is well positioned for continued growth and success over the next 5 – 10 years. I anticipate the bank making significant strides in these key steps.
While maintaining its core focus on housing finance, the Bank will diversify its product offering by including other related financial services to serve evolving customer needs. Housing Finance Bank will continue investing in digital technology to enhance the superior customer experience, improve operational efficiency, and reduce costs. We will collaborate with fintechs to provide innovative financial products and services.
We will introduce green mortgages and other sustainable finance products to support environmentally friendly housing projects and attract environmentally conscious customers. The Bank will also focus on growing products and services that help customers build climate-resilient homes.
The Bank will remain vigilant and adaptable to changing regulatory requirements, ensuring local and international standards compliance.
We are also committed to supporting entrepreneurs, especially in the informal sector. We aim to partner with and support innovative businesses to harness their potential and drive sustainable growth. Sustainability is also a priority. We strive to promote sustainable housing solutions and integrate renewable energy and water conservation practices.
I believe that by leveraging our strengths, embracing innovation, and adapting to the evolving market landscape, Housing Finance Bank will solidify its position as a leading player in Uganda’s housing and financial services sector and contribute to the overall development of Uganda’s economy.
What are some ways Housing Finance Bank is giving back to communities?
Housing Finance Bank partners with organisations and like-minded institutions to construct houses for vulnerable populations. In the same vein, the bank supports business incubation, helping entrepreneurs thrive through various initiatives. Collaborative efforts with like-minded institutions like Habit for Humanity, the Buganda Kingdom, and other development partners to build cost-effective and eco-friendly structures for less privileged communities in Buikwe, Kalagi, and hard-to-reach areas in Buganda are an example of the bank’s interest in transforming the livelihoods of Ugandans.