KCB Uganda has launched a new $15m (about sh40.5b) mortgage financing facility.
Albert Odongo, the managing director, noted at the launch at the Sheraton Kampala Hotel last week that the product would boost efforts to close the fast-growing housing deficit.
“We found out that introducing housing support financing facilities is one of the best ways of enabling more people access decent shelter in tandem with the fast-growing population and urbanisation trends,” he said.
A recent national housing survey unearthed a housing deficit of over 550,000 units, with Kampala alone having a shortfall of 100,000 houses.
Given a rapid rate of urbanisation, it is estimated that the housing shortage will hit eight million units, of which 2.5 million will be in urban centres. Kampala alone will need one million units.
The survey indicated that 87% of houses in rural areas were owner-occupied, while 49% in urban areas were rented.
“We have also realised that many people do not access mortgage facilities because of the cost involved. But our partnership with property developers will enable many Ugandans to own homes at competitively negotiated rates. Home ownership is one of the best financial investments that one can invest in,” Odongo observed.
“Despite the challenges in the construction sector, we are happy that the sector grew by 10.5% and accounted for 12.6% of gross domestic product,” Dr. Louis Kasekende, the deputy governor of the Central Bank, said in a speech read by Patrick Byabakama, the bank’s executive director for operations.
The increasing demand for housing is making the mortgage one of the lucrative sectors for financial institution to spread their nets.
Indeed, many commercial banks have now started mortgage departments to handle home financing and ownership.