Home ownership has eluded many Africans for years. Ghana Home Loans (GHL) focuses exclusively on the provision of mortgage products to Ghanaians. The company’s co-founder and chief executive Dominic Adu tells How we made it in Africa’s Dinfin Mulupi about how the business was started and Ghana’s mortgage market.
Give us a brief history about GHL. How did it all start?
Five years ago I teamed up with two other UK trained financial services professionals to start GHL with US$2.5m in capital. Our objective was to offer the average Ghanaian an opportunity to finance the purchase of their home. Our business idea is primarily based on a pure-play mortgage model, one that already exists in South Africa.
We faced lots of challenges mostly because Ghanaians prefer building a house rather than buying it, the avoidance of debt drawing many to this approach as well as evading various land title registry issues. Despite the challenges and critics, we have been very successful. Last year we wrote $20m of loans for new home owners. Our current portfolio stands at around $70m, providing mortgages to around 1,000 households in Ghana.
Tell us more about Ghana’s real estate sector
The real estate market’s contribution to national income in Ghana is estimated at around 15% per annum. Perhaps the greatest developments across the sector rest in the increasing levels of commercial real estate creation. Aside from the exciting opportunities this will open up for Ghana, we expect to see the continued trend towards significantly extending residential developments.
Describe some of GHL’s greatest challenges
Our key focus lies in combating the absence of market knowledge among potential home buyers. To raise awareness and make the process of discovery easier, we regularly organise housing fairs to gather potential home buyers and estate developers together with our mortgage staff on hand to provide assistance. The mortgage market is still in the process of realising its potential with a mortgage to GDP ratio of under 1%. As a company, our target is to drive this to at least 10% of GDP.
Ghana’s economy is predicted to be one of the best performing in Africa over the coming years. Do you share this view?
It is certainly a reasonable expectation. Plentiful gold and cocoa resources, along with the hugely significant recent discovery of oil in the country demonstrate the immense potential of this economy. The stability and cooperation that define Ghanaian society relative to the sub-continent are also important considerations in such predictions.
Any advice for other entrepreneurs?
Research until you have full confidence in your idea, then be tenacious in driving it through to the end, regardless of the naysayers.
What are your future plans for GHL?
Thanks to our growth so far, GHL is in a position to invest greatly in its infrastructure, discussion currently residing around whether to expand into new geographies or into complementary, non-mortgage businesses in Ghana. Irrespective of the outcome, we look forward to continuing our campaign to provide the average Ghanaian an opportunity to finance the purchase of their home.