Bridging Uganda’s estimated 2.4 million housing deficit will require more innovative solutions from key market players to collaborate, Housing Finance Bank has said.
According to officials in financial institutions, less than 80% of the land is titled and less than 5% of households have incomes high enough to a mortgage at the bank.
Derrick Mandela (white shirt) takes to Michael Mugabi, Managing Director, Housing Finance Bank (light blue shirt) and other dignitaries around this newly built house. (Photo by Shamim Saad)
These challenges have partly made it difficult for banks to extend to customers the necessary credit for mortgages.
Michael Mugabi, chief executive officer at Housing Finance Bank said bridging Uganda’s housing deficit can only be achieved with innovations.
“We have entered a partnership with low-cost housing developers, paved way for flexible loan repayments. All these initiatives are geared towards closing the current gap,” Mugabi said.
(L-R) Michael Mugabi, Managing Director, Housing Finance Bank, Charles Muhumuza, Treasurer, Kamba Boda Boda Association and Peace Ayebazibwe, Executive Director, Housing Finance interacting during the launch. (Photo by Shamim Saad)
He was speaking during the launch of an incremental housing solution aimed at unlocking opportunities for Ugandans to attain affordable homes and financial independence.
About 60% of Uganda’s population in urban areas reside in unplanned and informal settlements and slums.
These informal settlements are characterised by substandard housing, overcrowding and limited access to essential public services such as clean and safe water, sanitation, healthcare and education, among others.
Michael Mugabi, Managing Director, Housing Finance Bank speaking during the launch of Zimba Mpola mpola campaign launch held at Bukalango in Wakiso on Tuesday, June 21, 2022. (Photo by Shamim Saad)
These informal settlements are attributable to low levels of household incomes, complicated land tenure systems, high cost of building materials and technology and other related basic infrastructure issues.
“We are fully committed to bridging the housing deficit gap in the country and are always innovating ways to accomplish that.
The bank through strategic pillar of growing a sustainable business through facilitating property purchase, construction, completion and renovation financing has crafted a product targeting all Ugandans whether salaried or in the informal sector,” Mugabi said.
Between 2021 and 2026, the government pledged to recapitalize Housing Finance Bank and National Housing and Construction Corporation to enable the government-owned firm to expand and provide affordable mortgage finance to citizens.