Shelter Afrique has invested Ksh. 200M in the Kenya Mortgage Refinance Company in support of affordable housing as demand picks.
According to Shelter Afrique Chief Executive Officer Andrew Chimphondah, the move was geared towards accelerating the affordable housing projects in the country as many Kenyans have the zeal to own houses but they cannot due to finance inaccessibility.
“We are encouraged by the formation of the Mortgage Refinance Company which 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,” Chimphondah said.
He added that lack affordability has seen the country have only 24,000 active mortgages despite the fact that the country has a deficit of over 2 million units.
“If 100 Kenyans apply for mortgages only five will qualify because of lack of affordability; 10 might be due to high credit risk, but the majority will be disqualified on the basis that they wouldn’t be able to sustain the mortgage repayment terms”.
However, he recognized the efforts gy the government to provide land to developers as this will play a pivotal role in having the agenda reaching its target of 500,000 units before 2022.
“Cost of land constitutes about 40% 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,” said Chimphondah. “Through such initiatives, it’s possible to develop housing units costing as low as Ksh. 1.5 million which I believe would be affordable to many Kenyans.”
The company operates a private sector and provides long-term funding to mortgage lenders something which makes mortgage loans being cheaper and accessible in the country.
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