Kampala — Stanbic Bank has called for partnerships between leading Ugandan property developers and local authorities to create more affordable housing options for Ugandans and enhancing knowledge awareness about home loans and mortgages.
Speaking during a forum that brought together the different players in the real estate sector, Mr Shem Kakembo, Stanbic Bank head of personal markets, said while private developers and banks can take the lead to initiate housing projects, there is a need for developers to liaise with the local authorities and government to jointly provide social infrastructure such as roads, social amenities like piped water and electricity in areas further away from the city.
He said this will make these areas attractive and accessible to the target market.
Studies indicate that by 2040, almost 60 per cent of Uganda's population will be living in urban areas.
The rapid urbanisation is bound to put pressure on housing delivery systems which are often informal or reliant on the state.
To address this, Mr Kakembo said, banks and private housing developers are finding ways to create affordable housing options to meet the high demand from this growing population.
"The goal of providing affordable housing can only be achieved by bridging the gap that has existed between access to capital and execution capability. Stanbic Bank has taken strides to bridge this gap by reducing mortgage rates and working to strengthen partnerships with the developers in a bid to reduce on the overall cost to borrow. This will be a great benefit for the customer who is looking for value and a cost-effective financing option for their housing needs," Shem said.
Mr Jackson Emanzi, the head of home loans at Stanbic Bank, says the bank has also introduced loans to cater for those intending to acquire land for new developments.
"Not everyone has the capacity or wants to buy a finished house, many of our clients want to acquire now and build later or over time, this land loan product gives them this possibility," he said.
Manzi said the major role of mortgage finance is to enable individuals or businesses access adequate funds to acquire property in a timely manner. A mortgage loan, is used either by purchasers of real property to raise funds to buy real estate or alternatively by existing property owners to raise funds for any purpose, while putting a lien on the property being mortgaged.
According to Bank of Uganda State of the Economy Report 2016, sectoral distribution, building and construction, trade, manufacturing, personal and household loans accounted for the bulk of private sector credit, constituting more than 70 per cent of the total stock.