Shelter Afrique asks Kenya to establish housing microfinancier

Pan-African residential development financier Shelter Afrique says Kenya should establish a housing microfinance institution (MFI) to promote uptake of mortgages.

Speaking at the Affordable Housing Investment Summit in Nairobi, chief executive Andrew Chimphondah said such an MFI fund will make mortgages more attractive while opening lending for housing units development.

“Most policies have an exclusive urban focus, hardly consider low-income groups and ignore rural area dwellers. A government-supported housing institution will facilitate efficient and inclusive housing market systems across Kenya and in Africa,” he said.

Noting alternative housing finance products such as medium-term non-mortgage finance instruments, mini-mortgages and micro-finance should be introduced, Mr Chimphondah said borrowers can only get loans from conventional banks.

“For instance, only 2.4 percent of the Kenyan population is able to afford typical loan rates. At the end of December 2018, there were only about 26,000 active conventional mortgages in the whole country — the majority of which were granted to urban professionals,” he said.

His comments come as Kenya is implementing a housing development scheme that will see formation of a mortgage refinance company to facilitate cheaper mortgages.

Kenya has a two-million housing deficit and requires 150,000 housing units annually. The government has pledged to provide land and offsite infrastructure.