Here are low cost mortgage products in Kenya

Low income earners in Kenya can comfortably build their own houses, thanks affordable credit products offered by Rafiki DTM that allow them to borrow up to Sh10 million.

Self build product allows salaried clients to repay the loan up to a maximum period of 60 months and at 19.5 percent interest rate on the reducing balance while the Tujenge Pamoja package gives investment groups known as chamas of at least three individuals an equivalent loan of nine times their savings.

Those intending to set up commercial buildings enjoy an interest rate of 18 percent on reducing balance while those building residential ones pay an interest rate of 19.5 percent.

This means, if a chama has Sh300,000 in their account, they can get up to Sh2.7 million payable for a duration of up to 48 months.

Those packages present  most affordable mortgages in the Kenyan market and are meant to accommodate low income earners who are locked out of the mortgage market courtesy of heavy interests and lack of worthy collateral like log books and title deeds.

Those products allow clients to access credits using their pays lips and savings as securities.

This even as a recent report by The Center for Affordable Housing Finance in Africa show that 90 percent of Kenyans cannot access mortgages.

The report says that a decent house costs at least Sh1 million and Sh2 million and even at this minimum entry level, few Kenyans can afford a mortgage facility.

According to Zak Syengo, Head of Marketing and Corporate Affair, those products are meant to encourage low income earners to invest their hard earned money in worthy assets. ” Our products give a low income earner a sense of belonging in the mortgage industry,” said the Manager.

Tom Tula, Senior Business Development Officer at the bank sheds more light on the products that has been in existence for the past few years. He explained that those groups which have fixed accounts with the bank enjoy 3-10 percent interest on their savings.

In order to open a Chama account at Rafiki, Chamas must be registered and possess a constitution that guides their activities. Chamas can save and borrow as much as they need up to Sh200 million.

”Salaries for those seeking self build credits must have been channeled through their account for at least three consecutive months. Three month pay slips and a contractual letter from the employer must also be presented,” added Tula

A Sh1.9 million loan payable at 15 percent per year attracts a monthly repayment of at least Sh26000.

The Kenya National Bureau of Statistics classify a person with a monthly net  of Sh 23,671 as a middle income while those with more than Sh120,000 as upper income earners.

With this brief, CAHF estimates that only 11 percent Kenyans can afford 16,000 mortgage loans in the market which it terms as a drop in the ocean considering the country’s population of at least 40 million people.


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