Low income earners have a reason to smile following a study by Terwilliger Centre for Innovation in Shelter that shows financial institutions are read
Low-income earners have a reason to smile following a study by Terwilliger Centre for Innovation in Shelter that shows financial institutions are ready to fund housing for low-income earners.
This is to help them build, extend or renovate their homes.
This means that low-income households earning about Sh15, 000 a month could have an opportunity to live in their own houses now that financial institutions are eyeing the huge business opportunities in this segment.
This group may however have to wait a little longer as the government and the World Bank, have settled on those higher up on the income ladder.
Secondly, Treasury has created a company to offer cheap loans to banks with specific instructions to target civil servants, self-employed persons or salaried employees with mortgages of up to 30 years to reduce pressure on repayments.
The Kenya Mortgage Refinancing Company will receive a Sh16.1 billion from the World Bank to start operations this month.
The State will own only 20 per cent of the company leaving the remainder to be shared between development partners, banks and saccos. According to Treasury Cabinet Secretary Henry Rotich, the government will inject Sh1.5 billion into the firm for a 20 per cent shareholding.
Perhaps, CS Rotich may be persuaded to lure pension funds and insurance firms to invest in the mortgage firm.
Diversification of their investments into housing would have huge benefits. Loopholes used by the likes of NSSF successive boards to put off the kind of shenanigans routinely reported by the Auditor-General year-in year-out should be sealed.
If this requires fresh legislation or a tweaking of the existing laws so be it.
Let the National Assembly be prevailed to step-up the plate and do its work speedily.
The executive should hold consultations with Parliament to streamline the laws governing ownership and use of land.
The cost of land often times accounts for a huge chunk of the cost of the house.
Kenya also needs to find a way of ensuring the spread between interest rates paid to depositors does not vary with what is charged to mortgage holders. Technocrats should also come up with policies that encourage up-take of domestic savings.
Perhaps, Treasury may be persuaded to re-think a re-launching of the M-Akiba bond.
The State should also address the bureaucracy surrounding registration and transfer of land and houses.