BY FAITH ATHNUS
The government plans to recapitalise Housing Finance Bank to a tune of Shs61 billion faces tough talking shop as the parliamentary Finance Committee scrutinises the request.
Housing Finance Bank, one of the four public-owned banks in the country (the others being Pride Micro-finance, Uganda Development Bank (UDB) and Post Bank) has been competing favourably in the commercial banking sector milieu over the years—compared to the other government banks. But forecasts show that this might not be the same story in the long run.
This position is shaky and appears could come under threat if Housing Finance is not capitalised by Shs61 billion. Half of this money is expected to come from the government, which owns 49.18% of Housing Finance Bank. The other major shareholder, NSSF, has already committed to its share of recapitalising the bank.
However, the government’s plans face some scrutiny even as officials belabour to explain the need to have a bank owned by the government, a bank that could improve lending to agricultural sector as well as the housing situation in the country.
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In the first interface between MPs and Government, the latter officials tabled documents highlighting eight reasons why Parliament needs to approve the recapitalisation proposal, saying that this move would a critical step towards improving the housing conditions in Uganda.
While appearing before the Committee, David Bahati, the State Minister for Planning, defended the proposal, saying that the money is required to meet the capital requirements by the Central Bank.
The minister also told the legislators that the recapitalisation of Housing Finance Bank will be used as an instrument by Government to influence its policy on improving housing sector in the country and boost the bank’s capacity to provide more mortgages and make it affordable for Ugandans to own descent homes.
“Parliament should give approval for the Ministry of Finance Planning and Economic Development to carry out the transfer of Shs30 billion from sale of Pool Houses collection number 9900051114 in Housing Finance Bank to the paid-up share capital of the bank to boost its capital base and to convert to Shs30 billion into Government equity in the bank upon the completion of the capitalisation,
