The youth can tap into cheaper, flexible credit facilities offered by Saccos to enable many own affordable housing units and power up the government’s Big 4 agenda on housing, Mizizi Africa Homes has said today.
The developer challenged young people entering the job market, newlyweds and young couples to take advantage of current lower interest rates and improved conditions to access development credit from Saccos.
“Saccos are appreciating that most prospective homeowners find it difficult to get guarantors. They also understand that title deeds might not be out faster so they depend on agreement signed between home buyer and real estate developers to structure credit before Title deeds are out to act as collateral,” said Mizizi Africa Homes Chief Executive Officer, George Mburu.
Over the last two years, Saccos have been adopting customised financing models that favour borrowers without guarantors.
He adds, “Lack of guarantors has been a challenge that previously made it difficult for Saccos to structure home loans but now we are seeing them embracing the idea that they can fund someone who wants an affordable house.”
Many Saccos in the market have embraced a new model of financing home ownership by allowing prospective homeowners to save for a specified period usually from six months and the current balance earns prospective borrowers up to six times the value of their savings to help them secure a home.
“This gives you a greater edge since you stop paying rent earlier and focus on reducing your loan balance that you can also restructure for those who have shown commitment in payment of their facilities since Saccos are not very strict,” said Mburu.
Kenya has more than 5,000 Saccos out of which 80 per cent controls in excess of Kshs 600 billion in deposits with an asset base of more than Kshs Sh800 billion.
With interest rates on home loans reduced to 7 per cent for Kenyan’s earning a salary of below Kshs 150,000 a month through the Kenya Mortgage Refinancing Company (KMRC), the developer anticipates a rise in uptake of its affordable units over the coming months.
“This initiative will go beyond just housing more low-income Kenyans, it will also accelerate our pace of development, boost real estate sectors contribution to GDP, job creation and manufacturing output,” said Mburu.