UGANDA, Kampala | Real Muloodi News | There are many Ugandans that own land, but lack the financial resources to build their home. Building materials are expensive, and accumulating enough money to build can be seemingly out of reach.
However, now days most hardware stores offer different schemes in which you can deposit money in instalments so that over time, you can save all you need to build your house. For those who don’t have a lot of cash, or whose cash-flow is inconsistent, paying for building materials incrementally ensures you stay focused on building your house. Eventually, you accumulate enough money to build your home, or rentals, commercials among other building projects.
One land owner who took advantage of such a scheme is Tom Okelloto, a business man who deals in furniture. When he started building his house a few years ago, he didn’t know how he could possibly raise money he needed for the materials.
Then, a friend told Mr Okelloto about a saving scheme with Hardware World. “After learning about the scheme, I realised that I did not have to have all the money at once to start building my house,” he says.
“I went to Hardware World Ntinda and opened up an account. I was given a form to fill and they took my details. With that account, I keep on depositing small amounts of money for different building materials that I need for the ongoing construction of my house,” he adds.
Mr Okelloto now collects the different building materials which he has been depositing for. He explains that the biggest advantage of this scheme is that he gets the materials at the same price they were when he opened his account. Therefore, he does not have to worry about prices going up.
Making Dreams Come True
Peter Musomba, the manager at Hardware World Limited, says they have an arrangement for the building materials account – where customers open up accounts and pay for construction materials in instalments.
The essence of the construction material account is to help people achieve their dream and ambition of putting up a quality home. The hardware store charges no fees on managing such accounts.
“Many people wish to own a decent home, but their economic or income statuses will not allow them to do so. Everyone can own a home of their dreams, but the difference between those who can have it in a short time and low-income earners is that they do not have the same financial muscle and steady income,” Musomba explains.
The account arrangement caters for three main categories of people. These include low-income earners, those that are always busy at their workplace and those in the diaspora.
According to Musomba, low-income earners, who are the majority, usually spend a lot of time saving to buy plots and construct homes. The building materials account system helps them achieve their dreams in the shortest time.
“This is where the building materials account system comes in to help you achieve your dream, however long it may take. The account has no maximum or minimum balance and has no regulations, such as depositing monthly or weekly. The prospective home buyer can deposit money at their convenience and this makes it flexible because incomes are unpredictable. You may have money today and tomorrow you might not have a coin. You can deposit from as low as USh 1,000 up to whichever amount you wish, as your income dictates,” Musomba says.
The second category is those busy at their workplace, deposit money on their accounts and delegate an engineer to oversee construction works at their sites.
“We consult with the account owner first before giving the engineer the materials. We also build a relationship where we know where your site is,” Musomba clarifies.
The third category of savers is those in the diaspora who deposit the money to the dealer’s account to build the house upon return.
Opening a Construction Materials Account in a Hardware
You can open up a building materials account in your name using an identity card. You need to present a trusted next of kin in case unfortunate incidents, such as the death of the account holder, occurs.
“The intention of the person who opened the account must continue with the next of kin and it should be someone you trust the most. It is advisable to explain your intentions to the next of kin, whose vision will be the continuity of the project. The hardware assigns the account holder or next of kin a relationship manager who may visit the site and advise on the amount of materials needed,” Musomba says.
There is no duration for saving since the house determines how long you keep. After saving what you believe is enough, you take the building materials needed.
Musomba advises while looking for hardware, look for a reliable, reliable and trusted dealer. One who not only has a name to protect but also has been long enough in the business.
Material Price Fluctuations
According to Musomba, the future homeowner can purchase construction materials under the account holding system. However, the cost of some materials may fluctuate due to supply and demand factors. You may attach your deposits to a specific material.
“If, for example, cement cost goes up from USh 30,000 to USh 32,000, we will sell a bag of cement at the prevailing price at which the account opened,” Musomba says.
There is also another category of savers who deposit money without attaching it to particular building material. Under this arrangement, you can negotiate a deal that benefits both the dealer and the client.
In 2009, while chatting with a friend over how hard it could be to build a house, Edgar R. Batte discovered he did not have to have millions to start. He learnt he could open an account with a hardware shop to see his dream come true.
That afternoon he opened up an account with Hardware World in Ntinda. The cashier explained to Edgar how everything works, and his first deposit was USh 150,000. The cashier advised him to keep the receipts of every transaction and present them at the point when I was ready.
The beauty of this scheme is that even if the price of materials went up, he could still get them at the prevailing price when he deposited the money.
“By the third month I had accumulated receipts worth USh 4.2m, which I was aware was enough to afford the average rich guy an outing, but was glad was going to get me about 120 bags of cement. The savings kept steadily growing, which was good encouragement to keep depositing,” Edgar narrates.
Edgar advises savers not to drain themselves financially while saving for their dream.
“You may take out a loan, but you do not have to unless you have good reason to. You can start humbly, with a good focus. And you do not have to drain or strain yourself financially. When I look back, I am proud of the job I have done. You can start by saving in manageable amounts and as your savings grow, it will encourage you on,” Edgar says.
Like Edgar, Peace Namayanja also opened up an account with a hardware dealer in Ntinda in 2019. She deposited at her own will without pressure from her dealer. Some materials Namayanja saved included iron sheets, cement and ceiling wire mesh for renovating her family home in Seeta, Mukono District.
“I agreed with the dealer that I would deposit for the materials at the prevailing price. When I deposited what I thought was enough for the materials I wanted, I picked them at once and the renovation work started. It saved me a lot because I did not have money in one lump sum to oversee the renovation process,” Namayanja recalls, adding that she deposited between USh 50,000 to USh 100,000 regularly.
According to Musomba, it is essential to get background information about your chosen dealer before you deposit your hard-earned money with them, even if it means involving a lawyer.
You should always request your statement on how much you have deposited. Keep a record of every deposit transaction you make so that you are safe with reference in case of anything.
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