dfcu bank is one of the top financial institutions in Uganda offering home loans. Barbara Asiimwe has worked with the bank for close to 8 years, and currently heads its home unit. She spoke to The Independent’s Julius Businge about this topic.
What is your general assessment about the uptake of home loans in Uganda?
There is a housing deficit of 2.5million.The question now is how the bank comes in to bridge that gap. The bank is working with other stakeholders to offer financing to the persons who can take out a mortgage to buy a home. The bank is looking at salaried workers, business owners and people in the diaspora. Our products are long term – 20 years. We have realized that most youth and middle class people are increasing seeking homes in apartments or condominiums. We are in that space with our partners.
You are running a home loans campaign. What is in for the people of Uganda?
Having understood that there is a housing deficit in Uganda, we realized there are challenges that people have when it comes to acquiring homes. We have removed the 20% deposit that we used to require from our clients to qualify for a home loan. The bank is now offering 100% financing for purchases only. We can have an arrangement with anyone earning a minimum of Shs1.5million. We are partnering with real estate players in the market to meet our customer needs.
One would want to understand the various types of home loans/products that you are offering…
There is what we call ‘purchase’. This is a simpler option and has to do with one buying the land and a home on it which then becomes their collateral. The other loan option is for those who already have housing or a home but want to put up another project. The bank then uses the client’s home as collateral to extent credit to them to go on with their new investment. That is called an equity release. The third type is what we call a refinance – this is where one moves their loan from one bank to another to continue with their investment in a home.
What does it take for one to acquire a home loan at dfcu?
You need a clear line of income. The property you want to buy should be titled. You also need approved building plans in case you are going to construct. The bank does due diligence on all properties before putting pen to paper with a client. This has worked for us well as a bank and our clients.
But even with your campaign, most people are shunning mortgages. They say they are unaffordable?
The cost of acquiring property in Uganda is fairly high. We have given a longer period of loan repayment which comes with a manageable instalment amount that one has to pay every month. Our home loans are costing 16.8% as interest rate.
What specific challenges are you facing as a bank under this department of home loans?
The biggest challenge has been awareness. However, we are driving awareness of the product and our clients are appreciating. We have made our pricing simple. Clients are buying something genuine.
What more would you tell prospective home loan clients that have not yet made a decision on where to go for a home loan?
Our turnaround time is good. Once we get all the details from the client, it takes us only four working days to give feedback. Our license allows us to only offer financial services. But we have moved a step further to partner with real estate investors to easily facilitate those wanting to acquire homes. Once we agree with the client…we do not disperse all the entire loan amount at once…we do it in installments basing on the different construction stages of the home right from the foundation and up to the completion. This helps a client not to misuse the funds but also plan well with the money the bank is giving.
What management principles do you use to relate with your colleagues at work?
The management style at dfcu is about agreeing on certain deliverables. We have employees who do the execution. As the head of the unit, I will design and implement the strategy for implementing the agreed deliverables. We encourage team work and collaboration. We also value feedback.
What new thing should the market expect from this department in the near future?
The housing need in Uganda is going to grow. We are committed to working with our clients and partners to meet that need. We are in it for the long haul.