Peasants access low-cost mortgage ![]()
INNOVATIVE: Bukenya at the launch of the mortgage scheme
By Steven Odeu
A LOW-COST model house was given to a peasant as a result of the harvest proceeds mortgage scheme.
The Vice-President, Prof Gilbert Bukenya, recently handed over the house at Lwantama Village in Kakiri.
The sh4m two-bed room house is iron-roofed and cemented.
The farmer, Bruno Nzarubara, is under the Rural Mortgage Housing Scheme for the poorest of the poor.
About 80% of Ugandans live in rural areas under very poor housing conditions, while an estimated 40% survive on a dollar or less daily. Many cannot afford decent houses through mortgage schemes offered by companies like DFCU Group or Housing Finance Company of Uganda.
The current mortgage rate from local institutions is about 19% for residential, and 23% for commercial buildings, with a maximum amortisation period of seven years . This could be extended depending on individual negotiations.
Geoffrey Onegi Obel, believes the launch of the Rural Mortgage Housing Scheme shows that with minimal resources and a bit of imagination, the lives of the poor can be transformed.
�It the only way we can change the lives of the poorest within their means. We need policy convergence. If we can get everybody to think along the same lines, there will be a lot of transformation in the country within the next 12 months,� Onegi Obel said.
Under the scheme, peasant farmers will access housing loans from mircro-finance institutions and pay in installments from proceeds.
Nzarubara, who has been living in a small mud and wattle hovel all his life, will pay for the house through a mortgage scheme with Advance Uganda, a micro-finance body.
Nzarubara�s first deposit came from Upland Rice proceeds. He has committed to pay sh111,000 monthly over three years.
Rice in Uganda has two growing seasons and from a well-cultivated acre, a farmer harvests 30 100-kilo bags. At sh40,000 a bag, a farmer could earn sh1.2m in a season.
�The cost of the house includes bank charges, 4,000 bricks, six bags of cement, iron sheets, labour and profits for the construction firm,� Eng Moses Kizza Musaazi, the managing director of Turn-Key Consult Uganda, said.
EndsPublished on: Thursday, 24th February, 2005
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Guess how much the pizanti actually shells out in the end for a Shs 4M loan at 20% over 7 years .... some deal this is, a loan-shark would be hard-pressed to do much better!
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