Absa Bank Uganda has introduced land purchase loans in a bid to help more people realize their dream of land and home ownership. These loans will enable customers to access affordable financing for the purchase of land in Greater Kampala and select cities in Uganda.
The mortgage facility – offers up to UGX 500 million in financing and allows for a payment period of up to 10 years at affordable interest rates.
“Land is one of the most coveted assets in Uganda and a key factor in the housing sector that many of us want to acquire when we start planning for our futures because the purchase of land is a wise investment decision as it appreciates over time and creates motivation to get started on building a home. With this offering, we intend to provide affordable financing that will make land and home ownership a reality for our customers,” said Musa Mai Jallow, Retail Director, Absa Bank Uganda.
According to Knight Frank, a real estate consultancy, with Uganda’s current population of 42 million, a population growth rate of 3.3% and an urbanization rate of 5.67%, the country faces a housing shortage of 2.4 million units, with 210,000 in urban areas and 1.395 million in rural areas.
To introduce the offering to the market, Absa has entered into a partnership with Bakaima Real Estate Agents, a real estate developer offering land for sale in several areas of Greater Kampala.
“The demand for land remains high with the biggest reason for purchase being building personal homes. Many are unable to purchase land due to the unavailability of funds and are rarely eligible to get loans from the banks to make or complete their payments. We appreciate this partnership with Absa Bank for it will address one of the biggest challenges to land ownership in Uganda,” said Karim Kawesa, the Managing Director of Bakaima Real Estate Agents.
Some of the factors affecting the supply of affordable housing include increasing land prices and limited access to funding opportunities, while on the demand side, high costs of borrowing and limited mortgage opportunities are some of the barriers making it difficult for more Ugandans to afford a house.
“We intend to partner with more real estate developers to expand access to this facility. With increased urban development, we continue to witness higher demand for land in areas with better health, education, and other essential social services.” Jallow added.