Making Mortgages Easy, Cheap, Accessible

Mathias Katamba was recently appointed managing director of Housing Finance Bank. He spoke to Julius Businge about his impressions so far and other issues that are pertinent to the banking industry.

For the few months you have been here at Housing Finance Bank, what is your assessment of this organization?

The bank has a g brand and is really one of our legacy domestic financial institutions in Uganda. It is a household name and has played a key role in making home ownership a reality for many families over the years. Inherent in this good will is a unique opportunity to increase our market share not only in the mortgage sector but in the wider banking space.

What special qualities and skills is Housing Finance Bank going to get from you as the MD?

Transformational leadership is what I would want to see at the bank. But I don’t like talking too much about myself.

What about your personal leadership philosophy?

I would like to bring out the best in everyone. People have been gifted with so much talent but many only use a small portion of it. I believe that everyone was born a star and with the right performance management, the stars will shine.

Generally, what are your thoughts on the trends in Uganda’s banking industry?

Uganda is today a very attractive destination for many financial institutions as seen from the recent entry of players from the wider region and from West Africa. I think that this has a lot to do with the potential of our economy and our position in the region. While some institutions have struggled, there are also many success stories. I think that the banking industry will continue to grow, punctuated with innovation and I believe we are yet to see many exciting models in this market.

But profitability in the industry has drastically declined in the last two years. To what extent should this be a concern?

The global economy operates in cycles the same is true at local level. While it is true that asset quality, growth and profitability of the sector has taken a hit in recent times, this is likely to be short-lived and in my view does not pose a long-term structural concern. Many of the fundamentals of the industry are sound and we should therefore see a recovery in the coming years.

Some people argue that Uganda’s market is too small to accommodate 25 banks at the moment?

I think that this is arguable. Ours is a growing economy with enormous potential. If you look at the bankable population and you compare it with the number of bank accounts in the country, the picture gets clearer. Of course there are those who believe that the current size of the economy calls for consolidation and there is a g argument in favor of that view but there are fundamental flaws with that perspective too. The current environment is good for competitive dynamics and keeps the customer as the winner. Innovation with the customer at the center would set the winners apart from the rest.

Housing Finance Bank’s loans portfolio is largely covered by mortgages what new ideas are you bringing on board?

For more than 40 years, we were a mortgage company – the only one in the country at that. In 2007, the company transformed into a commercial bank and we have been growing I am happy to say. While we maintain our legacy and position as market leader in the mortgage space, we are a full-scale commercial bank. Over the coming years, we would like to scale up our value proposition in innovation and convenience. We want to be your partner in that important home purchase or construction decision but we want to go beyond that and be market-led in solving your other household and commercial financial needs.

HFB recently obtained a Shs 45 bn long-term loan facility from the European Investment Bank to extend credit to SMEs engaged in various sectors. What was the thinking behind this move?

Access to well-priced funding that is long-term in nature is a key component in strengthening our ability to support SMEs that are looking for long-time finance. This credit line from EIB now enables us to lend to SMEs for tenures of up to ten years.

What is your outlook for the banking industry in Uganda in the next few years?

I think the sector will without a doubt continue to grow. I foresee a lot of innovation to reduce costs and increase the penetration of banking services.

And where do you want to see Housing Finance Bank in the next few years?

In the years to come, I see the bank as a technologically-driven institution with sustainable profitable growth and the largest housing finance and mortgage portfolio in the country.

Source : The Independent

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