What started as a fairly daunting journey turned into a very enjoyable experience for Lino Musana, a real estate investor in Kampala, Uganda.
Mr. Musana had a grand plan. He wanted to put up modern serviced apartments in Kololo, an upmarket residential area of Kampala District. He preferred the area since there were ready tenants who included corporate, expatriate, and diplomatic staff.
The proposed project would consist of a nine-unit apartment block with six two-bedroom apartments, and three three-bedroom apartments.
Armed with a solid plan, he set out to seek financing from financial institutions.
As most entrepreneurs will attest, accessing finance for a project can be challenging.
Multiple rejections can frustrate even the most optimistic business owner. This is what befell Mr. Musana, a former civil servant who started investing in the real estate industry in 2000.
“We faced challenges in identifying a suitable financier. I approached a number of financial institutions and was not successful. Most of them had unfriendly terms. For example, there was one who wanted us to complete 40 percent of the project before they would inject any capital, “ he recalls.
Others, he adds, were asking him to contribute huge amounts of money, which he did not have.
Mr. Musana had shared this predicament with a business associate. And as luck would have it, this is the friend that would later connect him with what he refers to as “the most suitable financial partner.” A partner who understood the opportunity, and the risk and was willing to provide a structure that would allow Mr. Musana to realise his vision.
“I learnt about BPI Uganda through a friend of mine. He happens to attend conferences and seminars on real estate. As fate would have it, this friend happened to attend one such seminar organised by BPI Uganda in Kampala.”
“Since he knew that I was looking for a financer, he felt that they (BPI) would be a perfect fit for me.” We later met with BPI Uganda representatives and I sold them on my grand plan. The rest is history,” he says.
According to him, BPI Uganda offered more than finances. He says BPI is a partner who has walked with him since the onset, which enabled him to implement, manage, and complete the project within the budget and within the set time.
For the Kololo Serviced Apartments project, BPI Uganda matched Mr. Musana’s contribution with equity and provided the balance in the form of a loan.
“We not only got funding from BPI Uganda; they have walked with us, advising us along the way. The relationship we have is not the normal one you would get between a lender and a borrower.”
“In most instances, lenders give you the money, and it’s up to you to see how best to use it. But with BPI, we managed everything together, which is very healthy because when challenges come, we tackle them as partners, “he says.
Mr. Musana says the project, made up of nine fully-serviced apartments, is complete and the entire complex has been let out to a corporate over a medium-term lease. Other than the real estate business, his company, Fralima Investments Ltd., where he is a co-director, also deals with businesses in agriculture and agroforestry.
He says because of the great experience he has had working with BPI, he would recommend them to anyone, especially those in the real estate business, because they are friendly and professional, which makes work easier and fosters discipline for the borrower.