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Housing Finance Bank celebrated 50 years of service in Uganda. This golden jubilee is a big milestone for the Bank.? It symbolizes our unique heritage as an indigenous Bank that has been dedicated to serving the public while growing in a profitable and sustainable manner. It also re-affirms our commitment to provide tailor-made financial solutions in housing and other sectors of Uganda?s economy.

As an organization, we are delighted in celebrating 50 years of service in Uganda. This success story has been shaped by our tireless commitment to serving the Bank?s customers over the years. We continue to look to the future and seize the opportunity to serve Ugandans, making a meaningful impact on their lives across the country.

Governance and customer centricity

One of the key pillars that have kept us going is the presence of strong governance framework. Our leadership and governance right from the board through to management is elaborate and strong. Banks sell trust and once this trust is eroded, chances of collapsing are high. Housing Finance Bank has built a legacy that is based on the core values of excellence, respect, integrity and customer- centricity. We are always willing and are committed to service over and above the minimum standards and we always uphold high moral and ethical principles in our actions towards customers and all other stakeholders.

We respect and recognize the ideas and opinions of our customers and are focused on the superior satisfaction of those we serve at all times. These are the guiding principles that have kept the Bank strong for the last fifty years and will continue to guide all of the Bank?s actions in coming years.

The Bank in the Housing Sector

The evolution of Uganda?s housing sector is punctuated by rapid urbanization and population growth. With an urbanization rate of 5% per annum, a large percentage of the population will be urban dwellers in the coming few decades. The National Development Plan 2015 to 2020 estimates that Uganda will need at least 12.6 million new housing units within the next thirty years to keep up with its population growth. This backdrop clearly demonstrates the huge challenges and massive opportunity for development and investments in the sector for all players, public and private.

As the flagship provider of mortgages and housing finance for Uganda since 1967, the Bank started hosting a dialogue that brings together stakeholders and key players along the housing value chain both in the public and private sector to address fundamental deficiencies within the sector.

Unsurprisingly, the majority of new housing units for the Ugandan market was targeting the high end yet there is an acute housing deficit that is not being served by developers at the middle and bottom end of the income pyramid.

Key Interventions

At the time of holding the first dialogue, in 2015, the cheapest mortga-able home on the market by a formal developer was 135 million shillings but as a result of advocacy for affordable housing, we are? now seeing a steady supply of fairly priced units as low as 70 million shillings. This is still a long way in combating the deficit all together. However, it is a major step towards creating affordability for housing across the country. We have actualized a number of initiatives as an institution; among these have been the vibrant engagements with government in terms of support for a housing policy, as well as developments and interventions from a policy perspective. We currently have a strong housing policy where housing is at the forefront.

We have also had interventions from the infrastructure perspective and here we look at the critical elements that make housing expensive and how they can be lowered, say for example utilities. We have also gone on to fund developers and off- takers of those housing units from the developers. We have also introduced our up to 100% financing. Ordinarily in a home loan, one contributes 20-30%, but because of the challenge in Uganda, we can now give up to 100% financing to prospective home-owners. All these are interventions aimed at improving affordability of decent housing.

The Operating Environment

Uganda?s banking industry is robust and is operating in an exciting era of digital transformation, financial deepening and growth of the financial sector. The amendment of the financial institutions Act in 2016 to allow Agent Banking, Bancassurance and other lines of business have created new opportunities to grow revenues outside of the traditional interest income to non-funded income streams. This has created new opportunities for partnerships and collaboration for example, banks are now able to offer insurance products in partnership with insurance companies.

From a digital perspective, banks are now partnering with Fintechs and telecoms to increase their reach, with many banking platforms now being inter-operatable with telecoms to conveniently push and pull funds across the mobile money and financial eco-systems. Furthermore, the creation of the agent banking shared platform by the Uganda Banker?s Association has increased collaboration within the sector with the banks now able to bring services closer to the masses in a cost effective way. All of these initiatives have put the sector on the right path for growth and will continue to transform the sector in the coming years.

The Future

We are strongly aiming to improve on our standing in the industry by positioning ourselves as the most preferred Bank. We expect to achieve this by focusing on the delivery of a dynamic customer experience to drive our growth as an institution. We will also continue to devise solutions and interventions that speak to the customer value proportion of convenience, responsiveness, reliability and affordability and we shall increase our footprint across our existent agents and digital channels that we have continuously rolled out such as internet banking, investment management, mobile banking and alerts. We shall also strengthen our focus in the housing space as we drive affordability and flexibility in our mortgage and housing finance offerings.

We would like this journey to be an inspiration to many indigenous organizations in Uganda. There is enough room for growth and development of our economy with consistence, hard work and a strong workforce.

On a whole, the sector still has some way to go particularly in addressing the adequate supply of affordable units. Many developers are still growing their capacity to build to scale and as such they build a small number of units for the high income segment where margins are higher. Stakeholders also need to address further constraints to affordability such as design and cost of materials by exploring the use of new building technologies. However, a key factor contributing towards the cost of housing is infrastructure i.e. water, electricity and roads. Most people have to build some public infrastructure as part of their home and research shows that this contributes anywhere between 15 to 25% of the cost of a house. But for larger projects, the cost of public infrastructure may contribute as much as 40% to the final price of a house. Therefore it is clear that by simply providing public infrastructure; it is possible to bring down the price of a completed house by at least 30% and with these supply side bottlenecks sorted out, the supply of affordable houses will be matched with demand which already exists for well-priced homes that can be acquired through mortgages.

The good news is that unit costs are coming down due to the benefit of densification and the economies of scale made possible with the condominium law. As a result of this and our efforts to bridge the gap between developers and home buyers, affordability is now more than ever before a reality and the future of the sector in Uganda is very bright.

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