Land affordability continues to be a key challenge in Kenya given the current high cost of funding and unavailability of financing, amid rising property prices.
As a result, one-third of the public sector and urban wage earners live in rented and inadequate housing.
This scenario extends to commercial property ownership where SMEs operate from. According to land dealers at Zerohero Properties Limited, buying land remains the ideal decision for SMEs, listing numerous advantages.
“SMEs hold the potential of expanding as their business expands and this necessitates a holding land space that is cheaper to maintain, therefore, buying land earlier as a long-term strategy is a wise and good idea; The land is a valuable resource even in a business as it does offer self-financing through banks for boosting business capital,” notes Joseph Kinyua, the director Zerohero Properties Limited.
“Again land purchased earlier attracts less price and it appreciates with time. In case of economic/business recession, purchased land can be sold at an appreciated price to mitigate the recession business depression,” he explains.
- 1 Register your crops, cows to secure loans
- 2 Traders to benefit from Sh2.5m grant
- 3 Clean-up at companies’ registry begins
- 4 Using personal savings as capital?
In 2017 affordable housing was included as one of the national government’s pillars of growth in the President’s Big Four plan aimed at promoting long-term economic development. The plan focused on delivering 500 000 housing units for the lower- and middle-income population segments by 2022, to address the large housing deficit.
To this effect, several initiatives have been established such as the formation of the Kenya Mortgage Refinancing Company (KMRC) whose main the function is enhancing mortgage affordability by enabling long-term loans at attractive market rates through the provision of affordable long-term funding and capital market access to primary mortgage lenders such as banks and financial cooperatives.
Another initiative is the establishment of the National Housing Development Fund (NHDF) which was established under the Housing Act 2018 Section 6 (1), and is controlled by the National Housing Corporation (NHC) as provided for in the Housing Act, Cap 117.
According to Kinyua, “the government should consider the SME sector in the housing agenda through offering controlled grants towards investing in land, setting up interest-free loan to SMEs and startups that wish to buy land, capping interest rates for commercial bank towards financing land ownership, make land registries more accessible and affordable as well as putting up effective land boards to monitor land transfers to protect SMEs from falling to fraudulent deals and lose their savings.”