Faulu Bank unveils new solutions for real estate
Real Estate
By
Tasmima Ibrahim
| Jul 25, 2024
Faulu Microfinance Bank, a subsidiary of Old Mutual Group, has announced a range of innovative financial solutions aimed at addressing gaps in service access for key players in Kenya's real estate sector.
The new offerings, tailored for landlords, agents, and other stakeholders in real estate development and management, include expedited unsecured loans, customised financial packages for property improvement, and payment plans aligned with rental income cycles.
The bank is also introducing simplified application procedures and funds for property expansion.
"This initiative seeks to establish Faulu as the preferred financial partner, offering tailored solutions and fostering long-term relationships with landlords and agents, who are key stakeholders in the country's real estate sector," noted Faulu Bank Chief Executive Julius Ouma.
The move comes as Kenya's housing sector continues to contribute significantly to the nation's economic growth, accounting for up to 10 per cent of the gross domestic product (GDP).
Suitable homes
With rapid urbanisation - currently at 3.7 per annum according to the World Bank, the demand for housing, particularly in urban areas, is surging.
"Their joint efforts play a crucial role in ensuring effective property oversight, matching tenants with suitable homes, and maintaining overall stability in the real estate market," he continued.
Recent data from the Kenya National Bureau of Statistics (KNBS) highlights the growing trend towards affordable housing.
In 2019, Nairobi saw the construction of 3,940 one-room units, an 84 per cent increase from 2015. This trend reflects the preferences of young professionals and new urban residents with limited incomes.
While the real estate sector is expanding both formally and informally, challenges persist in product flexibility and accessibility for potential homeowners and borrowers. The KNBS report emphasizes that advancements in construction technologies and property transaction processes will be crucial in transforming the sector.
The real estate sector continues to grow rapidly, but obstacles persist in offering adaptable products and accessible solutions for those seeking loans or home ownership. According to the KNBS report, the industry's transformation is significantly influenced by progress in building technologies and improvements in property transaction processes, including buying, selling, and renting.