LETTERS: Saccos key to affordable housing plan

The challenge of offering affordable housing has for long been an uphill task for many developing countries. As at 2016, Kenya had 22,000 mortgages in the country of 45 million people.

A report by real estate investment firm Cytonn further notes that the low uptake in mortgages can be attributed to the high mortgage interest rates offered by financial institutions, which puts the dream of owning a home out of the grasp of many citizens.

According to the World Bank, Kenya has a housing deficit of over two million units, which increases annually by 200,000 units. Alongside this is the fact that nearly 61 per cent of urban households live in slums.

With one the pillars in the President’s Big Four Agenda focusing on the issue of affordable housing, efforts that look into how low-income earners can own decent housing have come to the forefront of government policy.

Considering that about 90 per cent of Kenyans are employed in the informal economy, it is timely that these strategies are being geared towards this segment of the population.

In this sense, providing decent housing will be a step in the direction towards curtailing the growth of informal housing settlements, while at the same time reducing social inequalities.

One way of reaping the benefits of inclusive growth is by linking this aspect to the Big Four industrialisation pillar. In a quest to develop our manufacturing industries, it is crucial to integrate the building of housing for low-income earners around the different Special Economic Zones (SEZs) into the infrastructure plans of such projects. In this way, workers in these SEZs will be provided with an opportunity to own homes, which they can pay for as they work.

Further, integrating micro and small enterprises (MSEs) into the supply value chains will provide a means through which they can strategically bolster their incomes in a way that enables them to afford the houses. Linking infrastructure to industrialisation will provide a means through which the affordable housing agenda can be met.

Another way of accelerating home ownership, particularly amongst low-income earners would be by channelling such efforts through cooperatives and Savings and Credit Co-operative Organisations (Saccos).

READ: Construction sector tipped to rebound on State’s housing plan

Seeing as these are bodies through which most informal sector participants operate, it would be a positive move for government to get them on board by incentivising them in a way that would enable them to offer housing loans at cheaper rates.

This would strengthen the sources of affordable credit to low income groups. This avenue, if pursued, would widen the reach of this programme to those that desperately need this intervention.

Given the difficulty in accessing affordable housing in the country, the deliberate move by government to make this pipe dream a reality is one that will positively contribute to the country’s economy by not only having multiplier effect on job creation in the construction sector, but also developing an ecosystem of services that will serve the residents of these housing communities.

Alex Litu Informal Economy Analyst.