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HFGroup w w w . h f g r o u p . c o . k e
Desirable
Properties
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Professional Services
Property and financial services company HF Group is leading the way in building affordable homes in Kenya and East spoke to Africa. managing director Frank Ireri about diversification and the company’s contribution to Kenya Vision 2030.
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F Group is a leading property and financial services group, currently operating with three commercial subsidiaries. HFC Ltd provides mortgage and commercial banking solutions, HFDI is their property development and investment arm, while HF Insurance Agency is a bank insurance subsidiary. They also run a non-profit initiative, HF Foundation, which focuses on training builders and tradesmen for the construction industry in Kenya, with the vision of creating “an army of one million artisans” for Kenya and East Africa.
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“We’ve built that capability to now include retail banking, corporate banking, trade finance and foreign exchange – the whole gamut of banking products
Frank Ireri, group managing director of HF Group, talks about its diversification since 2012, and how the focus of the company has changed: “10 years ago we were primarily a mortgage finance company, offering mortgage loans around main assets and, in terms of the liability side, focusing on savings accounts, corporate deposits and medium term bank loans. “With time we were able to lobby to have the Banking Act amended to allow Mortgage Finance Companies to be able to offer full banking products.
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This change enabled us to meet our customers’ desires to be their primary bank and also to level the playing field between commercial banks and mortgage finance companies. The most critical banking products we initiated were current accounts and entry to the clearing system, which then enabled us to issue our customers with cheque books so they can take care of their own transactions. We’ve built that capability to now include retail banking, corporate banking, trade finance and foreign exchange – the whole gamut of banking products.”
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Housing Finance Company of Kenya
HF Group has a close relationship with the Kenyan government, and indeed was founded by the government as the Housing Finance Company of Kenya in 1965. They soon became the premier mortgage finance institution in Kenya licensed under the Banking Act. Mr Ireri explains, “We were founded by a merger two years after independence between the government of Kenya and the government of the UK through CDC. We went public in 1992 and that’s when both CDC and the government of Kenya started selling down their shares. In 2007 CDC exited completely. They were then the anchor shareholder at 25%, until their share was bought out by
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“HF Group is also a leading provider of integrated solutions for the acquisition, development and improvement of property in Kenya Equity Bank and British American Insurance – which is now Britam – who came in as a consortium. Equity then sold their shares to Britam at the end of 2014, making them our largest shareholder. The government still has about 2.5%, they don’t have a board seat anymore but our working relationship is very close.”
Integrated solutions
HF Group is also a leading provider of integrated solutions for the acquisition, development and improvement of property in Kenya. Its strategy is based on the real estate value chain, including land ownership, property development, property financing and property insurance through its subsidiary companies. Mr Ireri says, “In 2012 we revived our development arm, Kenya Building Society, which we later rebranded in 2015 to HF Development and Investments (HFDI). Our property development focus is towards the middle and lower middle income segments of the market. “We’re also looking to set up a property management subsidiary in the next year. As we develop these affordable houses we then create the banking opportunities and insurance opportunities. That’s how we distinguish ourselves from the 42 players in this market.”
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Providing financial solutions since 1965
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The group has big plans for the future in terms of both banking and development: “In the next 12 months, on the banking side the big focus is on retail banking and targeting the same income groups to bank with. We’ve been expanding our branch network into some of the higher density parts of the country. At the beginning of last year we had about 15 branches, now it’s 24 and by the end of next year we’re hoping to have about 40.”
Komarock development
The Komarock shopping mall and largescale residential property development is a good example of HF Group’s recent diversifi cation. “When we revised the company in 2012 we had a land bank of 50 acres in Komarock. We saw a huge gap in the market for development. Over the last three years we’ve developed close to 600 homes as well as a shopping mall… Simultaneously, in 2013 we started our fi rst two joint ventures with landowners. Precious Heights and Kahawa Downs have both been completed, sold and occupied. So our pipeline of development now is joint ventures with landowners where we are targeting to build high density units to help achieve a 40,000 dollar and below selling price.”
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HF Foundation
As part of the Kenya Vision 2030 Delivery Board, HF Group are well on their way towards reaching their one million artisans target for Kenya and East Africa. The group’s HF Foundation has embarked on the programme, with the aim of addressing the shortage of skilled artisans in the country, providing services to students, career counselling, mentorship and a holistic learning experience for technical training for economic and social development. “The foundation launched a youth account around entrepreneurship, building and crafting, and has employed prevailing global practices and globally recognised techniques and technology to achieve this goal.” The initiative looks to be another exciting step towards closing both Kenya and the continent’s skills gap, and an important string in Kenya Vision 2030’s bow.
“The group’s HF Foundation has embarked on the programme, with the aim of addressing the shortage of skilled artisans in the country, providing services to students, career counselling, mentorship and a holistic learning experience for technical training for economic and social development
Head Office: Rehani House Kenyatta Avenue / Koinange Street PO Box 30088 – 00100 GPO T: +254 (20) 326 2000
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