National Social Security Fund (NSSF) has said it plans to start advancing members a fraction of their savings as collateral to acquire homes and other property if Parliament amends the NSSF Act.
In an interview yesterday, Patrick Ayota, the NSSF deputy managing director, said they have proposed to government that instead of paying members their savings at retirement, a fraction can be advanced to them to purchase homes.
“These are some of the reforms we have proposed for amendment in the NSSF Act. We believe we can pay members who have saved for more than 10 years, 30 per cent of their savings as mortgage to buy homes,” he said explaining that the remaining 70 per cent will be paid to them when they have hit the retirement age.
Members access their savings after they have hit 55 years.
Recently while commissioning Comfort Homes, private condominium flats at the Naalya Housing Estate, Abdu Kyanika Nsibambi, the manager in charge of housing at Centenary Bank, said one their hottest selling product now are mortgages where the bank requires applicants to show proof of monthly income, their cash flows or ability to repay loans to qualify for mortgages.
He said once the customer fulfills the requirements, the bank pays off the vendor, takes possession of the land title and the house becomes the security for the mortgage.
Yesterday during the Mkutano Economic conference that discussed the importance of capital markets in sustainable and inclusive growth, Mr Keith Kalyegira, the Capital Markets Authority chief executive officer, said advancing a fraction of pension funds to members when they are still working, is one of the ways through which Uganda could increase the stock of affordable houses and the size of the mortgage market in the country.
World over, according to, Mr Keith Kalyegira, the default rate on mortgages has the lowest risks because very often the borrowers want to do away with the loan immediately and own the property instead of meeting the monthly burden to pay the money.