Platform to help aspiring homeowners buy materials
By Macharia Kamau | November 18th 2021
Kenyans looking to build homes mostly buy materials in bits. Many however tell horror tales of how they have lost their materials - either by way of theft or weather elements eroding or rendering them unusable and with it their dreams of owning homes delayed or even killed.
A new product however promises to curb this challenge, by enabling aspiring homeowners to buy materials and only have them delivered to the construction sites when they are ready to build.
Dubbed Nyumba Mkononi, the mobile platform connects people building homes with suppliers and manufacturers of building materials. They then make payments over time, and once they have accumulated enough materials and are ready to build, they collect the materials.
Nyumba Mkononi Chief Executive Naftal Nyabuto said the product is targeted at the majority of Kenyans who cannot access credit to build their homes or tap personal savings and build at one go. He said the product mirrors the traditional manner in which most Kenyans undertake construction - saving while buying materials in bits.
There are however challenges to this deal, including the discipline of putting aside cash often without breaking into the savings account whenever there is an emergency. Savings are also affected by inflation, in that the cost of the materials would go up due to factors such as inflation.
“Most Kenyans are saving to construct. The challenge with this is that their money is losing value due to inflation. The cost of materials today is not what it will be tomorrow,” said Nyabuto.
The Nyumba Mkononi will be launched tomorrow. “Traditionally, people undertake construction incrementally. You get money today and buy building blocks, a few months down the line, you buy sand and so on. But these are susceptible to theft or even weather elements like wind and rain. Materials such as cement cannot also be stored for long.” Nyabuto said the platform connects aspiring home builders to manufacturers as well as professionals during the various construction phases.
It starts with enabling home builders to access architectural plans and bills of quantities. Customers access these for free. They are only charged when they ask for more personalised building plans.
“Plans are crucial as they give you an idea of what you need to build a house. When you talk to professionals, you find that access to architectural plans and bills of quantities in the country is minimal,” he said.
“People do not go for architectural plans because they are costly. But the challenge is that when you do not have a view of the materials or labour you need, you are likely to end up stalling at some point.”
In the second phase, the platform connects the aspiring homeowner to manufacturers and suppliers of building materials, where they will make payments and collect materials when they hit their targets.
One can however collect materials as soon as they make payment. In the third phase, it will connect them with masons, plumbers, electricians and other professionals needed to erect the building.
For products such as cement, steel and roofing materials, Nyabuto says Nyumba Mkononi has partnered with other firms - the same for materials building blocks and sand where it will be working with specific suppliers.
“Our arrangement is such that people will get materials at prices lower than they would get at their local hardware. You will be purchasing now to use later so that you do not have to worry about inflation eroding your money,” he said.
“You can also purchase the materials at the smallest units. This means that you can purchase 10 kilogrammes of cement as opposed to the conventional 50kgs and collect when you have purchased enough for your building needs.”
“The idea is to first do it on your phone right from getting the architectural plans to buying building blocks, cement and steel and this is at today’s price. This saves you the anguish of having to worry about your materials staying for long on-site where they could be stolen, lost to elements such as wind or cement starts forming lumps,” he said.
Manufacturers will use their distribution channels to deliver materials, which the home builder can collect at their nearest retailers. One will be required to collect their materials within five years, which Nyabuto noted is the time that Kenyans take to build homes, citing data by the UN-Habitat.
The money contributed by the home builders will be held in an account and the suppliers will only access the money when the contributors are ready to collect their materials. “We have a partner bank, which hosts the money. All these suppliers have accounts with the bank but they cannot access the money until you redeem,” said Nyabuto.
He said the firm has rolled it out on a pilot basis with the United Boda Boda Association. “We did a three-month test run, which has helped us understand many dynamics, including what happens when a person dies before they can redeem the materials,” he said.
“In such a scenario, the next of kin can resell or auction the materials. It is not a savings product… you buy the materials and if you opt-out, you can auction them.”
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