The Shelter Afrique has invested Sh. 200million in Kenyan Mortgage Refinance Company to support the development of affordable housing to meet the rising demand.
The Shelter Afrique Chief Executive Officer, Andrew Chimphondah said that there are many Kenyans who would like to own houses but do not have access to funds.
In a press release on Tuesday, Chimphondah said the mortgage refinance company provides long term lending to commercial banks, microfinance banks and Saccos to allow them to extend mortgage loans to eligible mwananchi over a longer period and at a lower cost.
He noted that housing developers were not keen on building houses without guaranteed take up hence less focus on the lower end of the market.
Lack of affordability, he explained was the reason why there were only 24,000 active mortgage in Kenya despite the country having a housing shortage of over two million units.
“If 100 Kenyans apply for mortgage, only five will qualify because of lack of affordability, 10 might be due to credit risks, but the majority will be disqualified on the basis that they wouldn’t be able to meet the mortgage repayment terms,” he said
Chimphondah praised the government for providing free land to developers and also ensuring the necessary infrastructure for housing development under its affordable housing plan which seeks to develop 500,000 housing units by 2022.
“Cost of land constitutes about 40 percent of the total cost of a housing unit and the Government undertaking to provide free land means a discount of equal margins on the units already,” he added
The Kenya Mortgage refinance company is mandated to implement the government’s affordable housing plan.
It operates as a private sector driven company with the purpose of developing the primary and secondary mortgage markets through provision of long term funding to the mortgage lenders, thus increasing affordability of mortgage loans to Kenyans.
By Melodious Kemunto