Shelter Afrique managing director Andrew Chimpondah (left), Housing PS Charles Hinga and Housing secretary Patrick Bucha during a joint media briefing in Nairobi on February 7. PHOTO | DIANA NGILA
The housing development financier has deferred repayments until January 2021 to cushion the developers from the adverse impact of Covid-19.
The developers had requested a deferral, citing diminishing rent returns as well as disrupted construction works.
Pan-African housing development financier Shelter Afrique has restructured loans granted to seven Kenyan home developers worth Sh3.1 billion, exposing it to a cash flow loss of Sh85 million.
Managing director Andrew Chimphondah said the board resolved to defer repayments until January 2021 to cushion the developers from the adverse impact of Covid-19 that has disrupted construction and slowed down economic activities.
“We are not absolving them from repaying the loans but we have given them a breathing space. We opted to forego our recovery of the principal amount and interest but in return boost client loyalty during the Covid-19 related hard times. We have also made food donations to 2,000 less advantaged families in Machakos,” he said.
The developers had requested a deferral, citing diminishing rent returns as well as disrupted construction works where supplies were delayed while the government issued new guidelines on social distancing that saw most construction works suspended.
The Nairobi-based financier with operations in 44 African countries said it had activated online services where applications from housing projects developers are now being scrutinised and approved via its desktop evaluation platform.
Mr Chimphondah said in an interview the institution had changed strategy from funding projects for the high- and middle-income earners in favour of large-scale mass-housing projects that benefit low-income earners.
In Kenya, it has approved eight projects with a total of 6,352 units worth Sh7 billion currently being built in partnership with local developers.
Apart from the Sh200 million stake injection in Kenya Mortgage Refinance Company, Shelter Afrique has also introduced a trade finance facility that would provide funds to contractors participating in the affordable housing programme to settle payments for imported building materials.
He said they were also in talks with local banks seeking to offer a Sh1 billion partial credit guarantee for mortgage loans that would see borrowers enjoy low-interest loans.
Mr Chimphondah said the institution would enhance participation in low-income housing developments to help reduce congestion and poor provision of services as witnessed in the uncontrolled mushrooming of slums across urban centres in Kenya.
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