Michael Karokora Mugabi, Managing Director, Housing Finance Bank

Housing Finance Bank registered tremendous progress in the last five years offering a comprehensive range of financial solutions for individuals, business and groups across all sectors of the economy.

Over the past 54 years, the bank has established and developed a strong, profitable and sustainable financial institution that focuses on supporting the development of this country. The Financial institution has grown from two branches to 17 branches countrywide with about 450 dedicated resource persons.

The Bank’s Managing Director, Micheal Mugabi shares some of its milestone achievements in the implementation of National Development Plan (NDP II) which spanned the period 2015/16-2019/20.

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Introduce Housing Finance Bank (HFB) to our readers?

Housing Finance Bank is the leading mortgage and consumer Bank offering a comprehensive range of financial solutions for individuals, business and groups across all sectors of the economy. Over the past 54 years, we have established and developed a strong, profitable and sustainable financial institution that focuses on supporting the development of this country. We have grown from 2 branches to 17 branches countrywide with about 450 dedicated resource persons.

Our footprint also stretches through 22 ATMs and over 500 bank agents spread out to ease accessibility for our customers. Our main objective as a bank is to provide efficient, innovative, customer-centric financial services for the benefit of all our stakeholders and partners. We are also committed to making every Ugandan’s dream of owning a house possible.

Please share some of the milestones of the Bank in the last five years.

Housing Finance Bank now commands approximately 60 percent of all Ugandan mortgage accounts. We have built this base over a number of years and we continue to craft affordable housing finance solutions for Uganda’s growing population.

Over the past five years, we have championed a number of initiatives that have translated into significant growth in our loan book to Shs. 550 billion from Shs401 billion, deposit book Shs. 654 billion from Shs. 353 billion, total asset base to Shs1.1 trillion from Shs. 680 billion. We also commenced the customer digital journey that has enabled our customers to seamlessly access several banking services from the comfort of their residences, businesses and even on the road.

In terms of industry competitiveness, Housing Finance Bank is one of only seven commercial banks appointed as Primary Dealers by the Central Bank effective October 1, 2020, after a new Primary Dealer system was introduced with reforms whose aim was to deepen the market and liquidity for Government Securities. Barely one month after the appointment, HFB was recognized as the best performing entity for October 2020 by the Bank of Uganda. This is a clear demonstration of our ability to trade government securities both in volume and value of transactions handled at the primary and secondary market. We attribute this to our flexibility, convenience, and competitive pricing regimes.

Am also proud to say that we emerged as the most innovative bancassurance agent for the year 2020 at the Annual Insurance innovation awards held under the auspices of the Insurance Regulatory Authority of Uganda.

As the leading mortgage lender in the country, we have financed several housing projects that continue to support several efforts to alleviate the housing deficit in Uganda. These projects have delivered thousands of housing units for the middle and high income home-owners and business proprietors. Additionally, several schools, hospitals, farms, leisure centers, office premises and transport businesses have been supported by the Bank with tailored affordable financial solutions.

What makes Housing Finance unique from other financial institutions?

We pride ourselves in being a bank whose ultimate focus is the customer and an institution that seeks to support every Ugandan in owning a home. Our breadth of homegrown experience puts us at a vantage point in crafting appropriate financial solutions critical for supporting our customers’ financial aspirations in Uganda’s development agenda.

We are fully committed to bridging the housing deficit gap in the country and are always innovating ways to accomplish that.  In our weighted initiatives towards closing the current 2.1 million housing units’ gap, we introduced 100% financing to enable the purchase or completion of residential property, entered partnership with low-cost housing developers, paved the way for flexible loan repayments and commenced financing of Incremental housing activities. Additionally, the Bank is also actively facilitating housing support services including loans for solar and water connection.

We attach so much value to flexibility and inclusiveness in our consumer and business offerings. We also go the extra mile to ensure our customers experience world-class services when transacting with us.

What are the challenges in the banking sector, share possible solutions?

As you are aware, the year 2020 has been a period marked with significant contraction of economic activity across major trading zones of the world. The onset of COVD-19 pandemic triggered a series of domestic and cross border movement restrictions that suppressed world trade for key trading blocks. Uganda’s economy followed the global trend in activity contraction on the back of COVID-19 impact on business operations. Consequently the country registered a trend of negative growth across key sectors including education, tourism, transport and real estate. This has resulted in a large number of customers in the banking industry failing to meet their financial obligations in lending institutions.

Banks across the industry have had to embark on loan restructuring as a way of supporting their struggling customers. Beyond this temporary relief measure, a number of lenders are dealing with heavy loan loss provisioning expenses as customers’ ability to service their loans becomes increasingly constrained.

Beyond the pandemic and its challenges, Uganda’s banking industry remains very vibrant. Banks continue to devise ways through which they can work together with the aim of supporting their respective clients. The good relationship between bankers, through the Uganda Bankers’ Association and the regulator, have been instrumental in creating an accommodative framework for distressed clients and also deepening penetration with the aim of bringing more customers in the banking fold.

Share any other information with the public if there is any.

Housing Finance Bank is here for you. And as already pointed out, the customer will remain our key focus. We have developed a number of customer responsive solutions and do believe these are vital in the current economic setting.

Ultimately, none of these achievements would have been possible without the trust and support of our Shareholders, Board of Directors, and an adaptive staff complement. The Government of Uganda, along with NSSF and National Housing & Construction Company (NH&CC) have kept the housing agenda at the core of their developmental imperatives for the country. As a bank, we commit to continue executing our mandate of enabling home ownership and financial independence, as we continue this journey of creating a better and vibrant future together for Uganda, our motherland.