Stanbic lowers mortgage rates to encourage new housing

In Summary

October 30—Stanbic Bank Uganda (SBU), has been reducing its mortgage rates as one way to help […]

The idea starts

Emanzi (second left) responds to a question  flanked by Isaac Mujenga (left) from the National Housing and Construction Company, Muffaddal Yeolawala of Universal Multipurpose Enterprises and Jaffar Tonda of Synergy Partners.

October 30—Stanbic Bank Uganda (SBU), has been reducing its mortgage rates as one way to help in the development of new affordable housing units across the country. At 18% SBU currently offers the lowest prime rate among Uganda’s 23 licensed commercial banks.

“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 strives 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,”  Shem Kakembo, Stanbic Bank’s Head of Personal Markets said late last week, during a housing development forum in Kampala.

“This will be a great benefit for the customer who is looking for value and a cost-effective financing option for their housing needs,” Kakembo said.

SBU partnered with leading Ugandan property developers to host the forum aimed at forming partnerships to create more affordable housing options for Ugandans and enhancing knowledge awareness about home loans and mortgages.

Held under the theme ‘Stanbic Banks role in supporting the housing market’, the forum brought together industry stakeholders, property developers, bank customers, land surveyors and prospective property buyers.

Delivering the opening remarks,  Kakembo said, “Uganda currently has a housing deficit of close to 1.2 million units, with over 200,000 units in Kampala alone. Studies also indicate that by 2040 almost 60% of Uganda’s population will be living in urban areas.”

He said, “The rapid urbanization is bound to put pressure on housing delivery systems which are often informal or reliant on the state. To address this, banks and private housing developers are finding ways to create affordable housing options to meet the high demand from this growing population.”

At the lectern

Kakembo said SBU is offering cost-effective financing to drive the real estate sector.

Talking about one of the new loan products SBU now offers, Jackson Emanzi, the Head of Home Loans said, “Due to market demand, the bank has also introduced land loans to cater for those intending to acquire land for new and additional 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.”

However Kakembo cautioned, “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 which will make these areas attractive and accessible to the target market.”

Analysing the current interest rate environment and efforts being made by the Central Bank to stimulate borrowing by reducing the CBR to a record low of 9.5%, Emanzi said, “As a bank we are firm believers in maintaining the transparency of our pricing to our clients. This is the reason why we have consistently matched movements of the CBR each time the Central Bank has made an adjustment.”

“Using that principal Stanbic bank has reduced its Prime Lending Rate by 500 basis points since the beginning of the year. At 18% per annum Stanbic currently has the lowest prime lending rate of all banks,” he said.



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