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Over the last ten years, there has been a steady shift in banking and financial services from the conventional channels to a more digitized service offering. This shift has been accelerated further by the onset of the COVID-19 pandemic, which has created an increased demand from customers for remote and alternative methods of accessing financial services.

The shift, however, is not new to Housing Finance Bank which begun its investment in digital transformation years ago with an aim of creating more value for its increasingly youthful and tech savvy customer base. In 2015, Housing Finance Bank introduced mobile banking and went ahead to introduce Internet Banking and Agent Banking in 2019. At the Beginning of 2020, the bank delivered a corporate internet banking suite to the business and institutional customers, further augmenting their access to remote banking services which saved them a lot of time and money.

According to Michael Opira, the Chief Operations Officer at Housing Finance Bank, along with innovation, the growth of Housing Finance Bank has been achieved through deliberate focus on the needs of the customers, and through skilling the staff to deliver the superior services that customers expect.

“Housing Finance Bank is now in the phase of its transformation where we are putting customers even more at the center of the business. We understand that demographics have changed and most of the customers are now tech savvy and demand convenience. Banking must be on the go. It must be faster and yet secure. Technology has changed over time and it has changed how we deliver services to the customer.”

It is considering these insights that Housing Finance Bank has structured itself to provide innovative solutions to be ahead of the changing needs of the customers. This is being done by investing in future looking core banking solutions and new technologies like Artificial Intelligence to offer additional value to customers. Additionally, the bank is currently collaborating further with FinTechs and other technology stakeholders while packing the mobile banking and online banking channels with more value-added services to be able to meet the needs and exceed the demand of customers.

Regarding the internal stakeholders, Opira notes that Housing Finance Bank is in the process of re-engineering internal processes in order to reduce touch points which create bottlenecks and affect turnaround time. He adds that there is a deliberate effort to invest more in the staff through trainings and empowerment to be able to support the changes and implement the evolving vision of the bank.

Despite a challenging business year 2020, Housing Finance Bank (HFB) exhibited high levels of resilience to post an impressive performance during a COVID-19 suppressed environment.2020. The bank’s asset base grew by 22% to Shs1.11 trillion up from Shs912.2bn recorded in 2019. This now places the bank over the 1trillion shillings mark, a feat achieved by very few banks, let alone HFB being the only indigenous bank in this class.

With Michael K. Mugabi at the helm, the bank registered phenomenal increases in its operating income by22%, customer depositsby 17% and growth in net income by 17%. Additionally, -the bank demonstrated a lot of agility in posting these results, which can be attributed to strong leadership and efficient processes.

Given the unpredictability of the operating environment during the year, coupled with a lockdown period, thebank’s loans advanced to customers slightly reduced to Shs551billion, representing a 0.5% decline. The bank however still made a net profit of Shs. 20.6bn, placing it among the top 10 best performing banks in the country.

Notable also is that Housing Finance Bank only became a commercial bank in 2007, having previously operated as a Tier 2 mortgage institution. The bank’s dominance in the Housing Finance sector continues with its consistent command of over 60% share of mortgages in the country.

Unsurprising, the bank has also proposed Shs3billion as dividends to shareholders, up from Shs. 2billion in 2019, demonstrating consistent growth in shareholders’ returns year-on-year.

Commenting on the bank’s performance, Housing Finance Bank Managing Director, Michael Mugabi, emphasized the bank’squick response to customers’ needs with several interventions and tailored solutions during the pandemic as key drivers for the 2020 performance.

“Our customer-focused initiatives enabled us to support business sustenance and resumption which is critical for sustained growth in key sectors of Uganda’s economy. We rose to the challenge posed by the pandemic and I must say it took a lot of hard work and team effort behind the scenes. We remain hopeful as we embark on yet another financial year. We believe better things are yet to come,” Mugabi said.

He added that HFB engaged and devised restructuring plans aimed at keeping its valued business customers sustainably operational and competitive.“We also worked to ensure that personal clients whose income sources suffered due to the pandemic were adequately supported,” he added.

On service delivery, Mugabi said, the bank enhanced its presence on the digital platforms to ensure that the bulk of the bank’s services could be accessed over contactless channels.

The bank’s improved platforms include mobile banking, retail internet banking, corporate internet banking, MasterCard and Agent Banking Points among others.

Optimistic

According to Mugabi, HFB continues to reach out to more customers with focused value propositions in all aspects of life including housing, business, education, agriculture, and infrastructural developments for the social and economic development of Uganda.

“Housing Finance Bank looks at the future with increased optimism. We are happy to continually refine our value proposition in supportof our customers’ growth aspirations as we all work to build our country Uganda,” Mugabi concluded.

In line with their strategic objective of improving customer service delivery particularly through use of technology, Housing Finance Bank has entered a partnership with World Remit to bring convenient money transfer to the Bank’s diaspora segment.

The partnership will add value to both existing and potential diaspora customers by enabling them to send money to their loved ones at a low cost, invest in housing and also make an investment in treasury products like government securities, treasury bills and bonds as well as custodial services.

Commenting on the partnership, Mr. Michael Mugabi, the Managing Director at Housing Finance Bank noted that Housing Finance Bank participates in different diaspora events such as UNAA Convention, UNAA Causes, UK convention, Uganda Community in the Netherlands convention, Dubai convention annually between July and October as a way of extending Bank products to customers.

“As a Bank, we believe in adding value to our diaspora customers (both existing and potential) and our surrounding communities. That is why this partnership is one that we take pride in as we continue to enable home ownership and financial independence. Our customers will be sending money directly to their bank accounts,” he noted.

“Over 50 years now, Housing Finance Bank has continued to provide viable solutions that enable home ownership for all Ugandans and together, we shall leverage on all available platforms to enable home ownership and financial independence. This partnership will solve problems of loss of funds through relatives, High cost of transfer, late mortgage repayments, lack of means to invest in government securities and many others,” Mugabi added.

The United Nations Human Development Report 2016 estimates the number of Ugandans in the diaspora at 2.5 million people but only 30% save back home. As of January 2021, Housing Finance Bank had 2,267 customers enabling them acquire homes and transact seamlessly. This partnership is expected to boost inward remittances as customers will be able to access services on mobile phones, tablets and computers through the World Remit App which is approved in more than 220 countries globally.

Housing Finance Bank and Bulooka App announced a new partnership to launch a digitized platform that enables customers to acquire property and motor vehicles in a fast, convenient, and hassle-free environment.

The users of the app will also be able to open accounts, pre-apply for a mortgage or chat with a Housing Finance Bank customer service assistant through the BULOOKA APP.

Commenting on the partnership, Mr. Michael Mugabi, the Managing Director at Housing Finance Bank noted that this partnership is pivotal in riding on the current digital transformation to support businesses across the entire housing value chain.

“I have personally encountered numerous absurd stories where prospective home-owners have lost millions of shillings through purchase of contested land, or been cheated by relatives under the guise of building for them homes particularly those in the diaspora without any means of tracking the construction process. Against this background Bulooka mobile app joins the housing eco-system at the right time to connect all sector participants by providing a free platform for advertising verified properties and connecting with the leading provider of mortgage financing in Uganda to offer on-hand credit support for the purchase of the desired property,” he said.

This partnership creates an integrated and simple to use platform where all real estate and property stakeholders interact seamlessly, cheaply and efficiently.

Speaking during the launch, Mr. Dennis Kamurasi, the Executive Director, Bulooka (U) Ltd, explained that the partnership will change how real estate business is going to be done in this market.

“The Bulooka App functionalities will direct client collaboration, lead generation and digital advertisements that have a direct applicability to the housing industry as well as home ownership.  Our goal is to make all Bulooka App functionalities available to an audience nationwide through this partnership with Housing Finance Bank.”

Bulooka App, among others, offers 3 key features;

• In-app account opening and pre-mortgage application and chat with banker ability.
• Offline capability which allows users to navigate and transact in the absence of an internet connection.

Unlimited access to a wide variety of properties and vehicles where users deal directly with owners or their authorized agents.

“Financiers are an important part of the housing value chain.” These were remarks made by Housing Finance Bank Executive Director Ms. Peace Kabunga, during a training on mortgages held at Kabira Country Club in partnership with Enwealth Financial Services.

The training that lasted two days, covered a number of topics that included the mortgages housing model, selecting a mortgage provider and many other key topics to assist Ugandans in learning about and taking the necessary steps to own property through mortgage financing.

According to the Uganda Bureau of Statistics, the current housing deficit in Uganda is estimated at 2.1 million units, with the deficit at its highest in Kampala. In order to curtail this deficit, Housing Finance Bank has put in place interventions including 100% financing to enable the purchase or completion of residential property, partnership with low-cost housing developers, flexible loan repayments and Incremental housing which enables construction in phases as well as use of untitled land. The Bank is also actively facilitating housing support services including loans for solar and water connection.

Speaking at the training, Ms. Kabunga quoted the Center for Affordable Housing Finance (CAHF) report that stated that Uganda is largely driven by private sector-led housing development, which is unable to meet the growing demand for affordable housing. There is thus a widening deficit of housing, estimated at 200 000 units a year.

She further noted that 61% of working class live in rented houses and that 90% of households live in a rented apartment for up to 3 years and then shift. Additionally, most Ugandans build in phases for an average of 4 years as it is difficult to get money in a lumpsum. Unfortunately, most retirement packages do not support completion of a house at retirement.

On selecting a mortgage provider, Kabunga advised Ugandans to always do their due diligence to ensure that the selected provider has experience in the mortgage business, the financial strength to suit their needs and can provide an all inclusive cost for the mortgage.

Over the past few months, Housing Finance Bank has entered into partnerships with the strategic objective of reducing the housing deficit in Uganda. Innovations such as the partnership with Bulooka App allow for Ugandans to open accounts, look for properties to buy and even pre-apply for a mortgage without additional fees.

Housing Finance Bank (HFB) has launched a consumer loan campaign aiming at delivering improved financial access to its growing customer base.

Speaking at the launch, Mr Michael Mugabi – the Managing Director at HFB said they have deliberately made the loans unsecured for the salaried customers, eliminating the need for any form of collateral.  Our customers can now access up to Ug. Shs. 300 million to take care of their personal development and acquire homes, plots of land, cars and other requirements as the country embarks on the path to economic recovery.

“Asked what one needs to access this loan, Mr Mugabi said, “All they need is a salary account and an employment contract with your organisation.

The Bank is offering amounts as high as Ug. Shs. 300m, with long repayment periods of up to 72 months to enable customers to have lower monthly instalments. For customers who wish to transfer their loans to Housing Finance Bank, special waivers on arrangement fees are readily available.

Mr Mugabi emphasized that one does not need to have banked with the Housing Finance Bank to borrow.

Housing Finance Bank has been named the most innovative bancassurance agent for the year 2020 at Annual Insurance innovation awards held at Serena hotel on December 18, 2020.

Receiving the accolade, Michael Mugabi, the Managing Director of Housing Finance Bank noted that consumers are now, more than ever expecting rapid responses and personalized care and as a result, insurance service providers ought to ensure that customer service remains a priority.

“In the year ahead, as Housing Finance Bank we pledge to maximize customer-oriented service, execute maximum competitiveness in products, business operation, and systematically establish and strengthen mid-and long-term strategic partnerships,” he stated.

The Insurance Regulatory Authority (IRA) announced the inaugural Insurance Innovation Awards early this year and are aimed at recognizing the role innovation plays in advancing the insurance sector in Uganda.

According to IRA, the focus of these awards is on use of new technologies, new products and services, and other advancements in the insurance industry with the aim of fostering innovation and creativity in insurance sector.

Housing Finance Bank was licensed to sell insurance products to its customers on the 13^th of April 2018 by the Insurance Regulatory Authority (IRA) of Uganda. Overtime, the Bank’s market share has grown from 2.7% in 2018 to 4% in 2019 according to IRA industry data. Q1 results however show that the Bank underwrote the most general business premiums registering Gross Written Premium of Ugx. 1.2Bn.

“The sectors’ distribution revolution has given a new dimension to insurance products distribution on the market. Housing Finance Bank together with Insurance partners have crafted insurance solutions for its various customer segments thereby creating more customer satisfaction,” Mugabi added on the sidelines of the awards event.

Housing Finance Bank’s flagship product is the Group Life Insurance embedded on to the revolutionary Saveplus Savings Account. This is an incremental savings account for future investments with free embedded insurance as outlined; Life Cover of up to Ugx.25M, Total Permanent Disability Cover of Up to Ugx.12.5m, Medical Cash benefit and Last Expense Benefit.

The product has led to increased Insurance penetration. This is depicted by the 47% growth in enrollments over a one-year period that is from 1,671 in August 2019 to 2,464 by November 2020.  It has also led to an improved customer savings culture. This is depicted by the 80% growth in account average deposits over a one-year period that is from Ugx.1.5m in August 2018 to Ugx.2.3m by November 2020.

A growing demand for convenient means of transactions and the need for 24-7 services means that more customers are now enjoying a greater sense of freedom. Availability is the name of the game as customers would like instant access to loans, deposits and their account status. We caught up with David Twinamasiko, the Senior Manager Alternate Channels at Housing Finance Bank to explain to us what it is that the bank is doing in this regard. Below are the excerpts;

Qn: How do you rate digital transformation in the banking sector?

There has been a remarkable shift to digitization of banking services Over the Last ten years .In this period, most banks have embarked on digitizing most of the their processes with changes in their core banking systems to deliver more value to the customer as a result of efficient and leaner processes. This has significantly led to introduction of several innovations to the clients which have increased remote access of banking services from the comfort of their workplaces and homes. Clients are able now to check their balances, make payments and transfer funds conveniently with handheld devices like mobile phones in a very secure way among several interventions in place.

Qn: What alternative channels does Housing Finance Bank currently offer?

Housing Finance Bank has certainly gone through the digital transformation to create more value to its customers with introduction of Mobile Banking in 2015, MasterCard, Internet Banking and Agent Banking in 2019. At the Beginning of 2020, we delivered our corporate internet banking suite to our business and institutional customers. All these services augment our client’s access to banking services remotely which saves them a lot of time and money and inherently increasing their business value. Our ATM network which has provided services to our customers since 2004 has grown over the years with the onboarding of Interswitch and MasterCard. Our Clients now have access to over 500 ATMs locally and access in over 200 countries with their MasterCard.
Our internet Banking is a self-registration service that can be accessed anytime while the other services are activated in less than 30 minutes at our branches.

Qn: What percentage of HFB customers are now using alternative channels?

Over 75% of the bank clients use our alternate channels. The Bank has over the years educated the clients about the benefits of using our alternate channels which actually empower them. Our digital services are offered in a secure way to the clients. We are aware that is not simply about preventing an attack but also ensuring the security features are well blended with the transactions in a simple way by removing the complex requirements. A shift to use alternate channels has also been enhanced more recently by the move to go cashless due to the COVID-19 pandemic.

Qn: Has Housing Finance Bank registered an increase in digital channels since the onset of the Corona virus pandemic?

The COVID-19 has created a shift globally to use digital channels. This is also seen from the recent BOU reports for the period ending June 2020 where cashless transactions have recorded increased activity during the first half of 2020 compared to the same period last year.
Data from Bank of Uganda attributes the increase to actions undertaken to mitigate the spread of Covid-19. The report also notes that the value of mobile and Internet banking transactions increased by 157.3 percent and 52.9 per cent, respectively. Active users on Internet and mobile banking platforms grew notably by 36.7 per cent and 46.9 per cent, respectively during the period. Certainly Housing Bank has strongly advised clients on measures to prevent the spread of COVID-19 and among them increased awareness to utilize digital channels. This has certainly created a shift to embrace our Internet and mobile Banking which are complemented by the agent banking access points which are in the local communities.

Qn: We have seen the introduction of Apps by many banks in Uganda offering a range of services. Please share some of the unique services offered by the HFB mobile app.

The Housing Finance Bank Mobile app is one of a kind with a warm look and feel for any user with an android or apple mobile device. The app is accessed in the play store and apple store for android and apple users respectively.
With the HFB app, you can conduct a Balance check for deposit or loan account remotely, Transfer of funds to accounts in the bank, Standing order creation and other services requests like cheque ordering, Payment for all your utility services like pay TV among others. The app also facilitates transfer to mobile network providers for mobile money services.
It should be noted that our clients can access our mobile banking service using the code *225# on any type of mobile phone whether smart or feature.

Qn: Security remains a major concern for Ugandans especially given the increase in instances of fraud and online attacks on financial institutions. How is HFB addressing this issue?

The Bank has embedded security in all transactions without making it complex to the client.
Users are required to use passwords to verify access to services and also use one-time passwords to validate any financial transaction. We have provided both soft and hard tokens for our corporate internet banking clients to generate one-time passwords to validate the transactions. The Bank regularly sends advisory to the clients on how to detect and avoid fraud schemes in any form using our social media accounts, radio and email.
All our back-office processes are secured and control measures are in place to detect any form of fraud on any of our digital platforms 24/7. We also ensure that all the partners associated with the bank providing services are regularly audited and carryout tests to ensure their environments are secure. Compliance to all regulatory requirements and international best practice is embedded in our day to day operations.
Our contact center is available to our clients 24/7 to report any suspicious activity and any form of compliant which keeps the bank connected to the client.

Qn: Can we expect a reduction in physical branches as Housing Finance increases its focus on alternative channels of banking?

The Bank has maintained an optimal complement of the branches to support our clients. The branches offer their special place to our clients since we cannot eliminate face to face interactions which create room for break through client-led innovations.
Focus on the use of alternate channels of banking will remain high in 2021 and years to come. This is mainly driven by the customer need for convenience and the need to be in control of their finances (Financial Independence). The Bank takes closer review of the customer needs and develops services that meet these needs. This philosophy drives our innovation and we seek to increase use of the alternative channels from 75% to 85% in the next year.

Qn: What else can Ugandans expect in the future from a digital perspective?

Ugandans own their destiny and all innovations that will create impact will come from interactions with the Ugandan Customer. These client-led innovations create more value to the users since these meet their needs. Therefore, from a digital perspective, more interventions that allow the customer to open an account remotely, update it with any information and even borrow money using their mobile devices are going to become common place. This increases access to the financial services and strengthens their potential to obtain other financial products like housing loans that significantly improve their well-being. We as Housing Finance Bank seek to fulfil our purpose to enable home ownership and financial independence. All our digital innovations will follow this philosophy to prosper Ugandans.