NSSF Buys Out dfcu

Oct 03, 2003

THE National Social Security Fund (NSSF) has acquired a 50% stake in Housing Finance Company of Uganda Limited (HFCU) at sh3.8b.<br>HFCU, until recently, had been the only major mortgage finance company in Uganda.

By Steven Odeu
THE National Social Security Fund (NSSF) has acquired a 50% stake in Housing Finance Company of Uganda Limited (HFCU) at sh3.8b.
HFCU, until recently, had been the only major mortgage finance company in Uganda.
It also takes deposits from institutions and the general public.
The deal was announced yesterday after clearance from the Bank of Uganda.
NSSF bought out the Development Finance Company of Uganda’s (dfcu) 50% shareholding in HFCU. The acquisition entitles NSSF three board positions including that of the chairman in HFCU.
Addressing a joint press conference at Workers House, Kampala, the labour minister, Bakoko Bakoru Zoe, said the NSSF board had taken a wise and bold business decision that will benefit the entire country “as NSSF will set up housing projects to benefit even the low income earners.”
NSSF chairman, Geoffrey Onegi-Obel, said the deal was the first phase of the strategy to reconstitute and reconfigure the mortgage finance industry “and launch a national home ownership drive.”
“This transaction is an important formulation and milestone that will trigger off the process of transforming Uganda’s economy through the home ownership industry,” said Onegi-Obel.
He said with the support of domestic and external partners such as the International Finance Corporation, Overseas Private Investment Corporation and the Fannie Mae Corporation, NSSF would strengthen the primary mortgage market “and deliberately engineer the growth of the secondary mortgage market.”
He said this would in turn trigger off increase in the housing stock in the country.
He said NSSF plans to put a minimum of 2,000 housing units on the market annually.
Onegi-Obel said the expected reconstruction and expansion of the mortgage sector would cause considerable growth in the housing sector and in turn generate jobs in various sub-sectors of the housing industry.
“We expect the home ownership industry to trigger off GDP expansion and to account for 33.3% of the economy within the next five years and 50% of the economy over the following ten years,” said Onegi-Obel.
He said instead of paying for rent, people would be servicing mortgages, which ccould be paid up in 20 years.
HFCU is 50% owned by Government through the National Housing and Construction Company Limited.
Dr. William Kalema, the dfcu Group chairman, said,
“The board felt that it made business sense for us to focus our energies on growing dfcu mortgage scheme as we sought for a buyer for our shareholding in HFCU.” Ends

(adsbygoogle = window.adsbygoogle || []).push({});