The Co-operative Bank has made a major stride towards partnering with the national government in the implementation of the Big Four housing agenda.
This is after the bank’s board of directors approved Sh. 200 million capital injection into the Kenya Mortgage Refinance Company. This is the mortgage refinancing vehicle that the national government has established as a key driver in the mobilization of affordable financing for the project.
“Whereas the government has kicked-off the initiative of the Kenya Mortgage Refinance Company (KMRC) to source for long-term financing to fund the provision of affordable housing to the majority of Kenyans the Co-op Bank Group expects to play a critical role on this key social and economic agenda,” said the bank in a statement.
Affordable housing is one item on the agenda that President Uhuru Kenyatta has singled out as an area of focus in his second and final term in office.
Already, Sh. 6.5 billion has been allocated towards the housing agenda. Under the affordable housing plan, a bedsitter will cost a maximum of Sh. 800,000 to purchase and Sh. 1 million for a 2 bedroom while a 3 bedroom unit will cost Sh. 2 million.
The first phase that has been coveres in the 2017/18 financial year includes Park Road with 1,640 housing units, Makongeni with 20,000 housing units, Shauri Moyo with 5,300 housing units, Starehe with 3,500 housing units, Mavoko with 5,500 housing units, Social Housing with an allocation of 15,000 housing units, Counties with a set of 48,000 housing units and Nairobi County with an allocation of 67,8000 housing units.
“We shall begin with Park Road, Kiambiu and Starehe in Nairobi, and Mavoko in Machakos. This is part of the 500,000 housing units the President has promised to build in his final term,” Cabinet Secretary James Macharia.
In the same vein, the government, in collaboration with county governments, would build 2,000 housing units in each county.
“We have already secured 7,000 acres of land for this initial phase. We are also working with the National Treasury, the World Bank and other stakeholders to operationalise the Kenya Mortgage Refinancing Company to provide medium and long-term liquidity to mortgage lenders,” says Macharia.
The Government also intends to eradicate slums in Nairobi and other major towns in the next five years, the CS said, adding that every housing project will include 200,000 social houses in slum areas.
The project is set to be undertaken in phases. The middle to high income phase will cater for Kenyans earning between Sh. 50,000 to Sh. 99,000.
The low cost phase will be for those earning between Sh. 15,000 to Sh. 49,000.
The social phase will be for those with a monthly income of between Sh. 0 to Sh. 14,900.