Housing Finance has announced its product diversification plan by venturing into asset finance to reduce its reliance on its traditional mortgage business and magnify its profits. The entry into asset finance is expected to support growth of its banking business through provision of a complete suite of retail and corporate banking products and services to its customers.
“Asset Finance together with Trade Finance and corporate banking are expected to change our business mix resulting in more volume business, greater profitability and value to our clients,” said Housing Finance MD Frank Ireri.
The mortgager is targeting to provide short to medium term funding to finance new and pre-owned motor vehicles, tractors and related implements, medical and laboratory equipment, school buses, industrial equipment, office and contractor equipment. It will leverage on the existing customers to grow the asset finance arm.
The Bank will also offer insurance premium financing option to assist clients with insurance repayments for the assets purchased with the option of renewing it periodically over the duration of the facility and beyond.
“Our corporate customers have been asking for end to end solutions and asset finance is the first of many solutions we plan to introduce within the coming financial year,” noted Mr Ireri.
“The banking strategy is beginning to take shape both in terms of deposit mobilization, income diversification and asset diversification.” As part of its increasing retail footprint, Housing Finance has opened branches at Sameer Business Park and Thika Road Mall (TRM) with plans underway to open branches in Kitengela, Westlands and Naivasha before the end of the year. It plans to roll out an additional seven new branches in 2015 in line with its business growth strategy.
The company will be seeking additional funding through a Rights Issue in the first quarter of 2015 to bolster its capital strength to support its growth strategy. Plans are also underway to establish a holding company in line with industry trends. This will be left pending until the shareholders give a nod during the Annual General Meeting to be held early next month.
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