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Harambee first sacco to access mortgage refinancing

Harambee Sacco projects to finance up to 600 units at a cost of Sh2.4 billion by 2025.

In Summary
  • Sacco's facilities enjoy a maximum repayment period of 25 years and is capped at Sh4 million
  • The sacco has since launched two products: the Harambee Home Loan and the Harambee Jenga Loan.
L-R) The Chairman Harambee Sacco Macloud Malonza displays the very first debit card printed and issued instantly at the Sacco, witnessed by the Director Cooperatives Banking at Co-op Bank Vincent Marangu and Principal Secretary, State Department for Cooperatives Ali Noor Ismail looking on./COURTESY
L-R) The Chairman Harambee Sacco Macloud Malonza displays the very first debit card printed and issued instantly at the Sacco, witnessed by the Director Cooperatives Banking at Co-op Bank Vincent Marangu and Principal Secretary, State Department for Cooperatives Ali Noor Ismail looking on./COURTESY

 

Harambee Sacco has become the first to be licensed to offer mortgage facilities from the Kenya Mortgage Refinance Company.

Chairman Macloud Malonza said they project that by 2025, the sacco will have financed up to 600 units at a cost of Sh2.4 billion.

 

The sacco, after getting the greenlight, launched two mortgage products on Monday; the Harambee Home Loan and the Harambee Jenga Loan.

“Statistics show that 36 per cent loans granted by saccos to members- about Sh119 billion between 2012 and 2016- went directly to supporting land purchase and or housing,” Malonza said. 

The Harambee Loan is a product for members keen to buy an outright home and therefore avoid the trouble of building.  The Harambee Jenga Loan on the other hand seeks to help members build their own homes.

Both facilities enjoy a maximum repayment period of 25 years and is capped at Sh4 million.

KMRC chief executive Johnstone Oltetia said the company last week received a license from the Central Bank of Kenya to extend long term financing to shareholding institutions for onward lending to borrowers seeking affordable home loans.

“We already have a mortgage portfolio of Sh4.5 billion available for re-financing subject to due diligence,” he said.

Oltetia said KMRC is working with participating institutions guiding them on the process and requirements for accessing mortgage refinancing.

 

KMRC was established by the National Treasury to support affordable housing development in Kenya. It was incorporated in April 2018 under the Companies Act for purposes of providing long-term financing in order to increase availability of affordable home loans.

Its mandate is in line with President Uhuru’s Agenda Four, which seeks to ensure Kenyans have access to affordable housing, universal healthcare, improve manufacturing and food security.

KMRC will also advance cash to commercial banks and mortgage companies as well for onward lending to individual home buyers.

The government plans to build at least 500,000 low-cost houses in a partnership with the private sector. Aside from offering low-income Kenyans with access to housing, the scheme will help to create over 300,000 jobs, while providing a good market for local manufacturers and suppliers.

Housing and Urban PS Charles Hinga said that the government established KMRC to support primary mortgage providers.

“This is a timely and noble idea taking into consideration that affordable mortgage finance has remained a pipe dream for long and continues to be one of the biggest impediments to delivery of affordable housing,” said the PS.

He said the ministry is putting all efforts and measures to realise the affordable housing programme which is one of the government's Big Four Agenda.

Harambee Sacco has over 80,000 members in 174 branches across the country. It draws its membership mainly from, Kenya Defence Forces, National Police Service, National Youth Service, national and county governments, government parastatals and departments and constitutional bodies.