Housing projects have for a long timed been concentrated in Nairobi and major towns/FILE
Housing Finance Managing Director Frank Ireri said the main aim is to be able create affordable housing especially in the county governments adding that housing projects have for a long timed been concentrated in Nairobi and major towns across the country.
“The reason why offshore funding is attractive is because it is cheaper and this is the main incentive. Five years ago we would not be able to raise even a million dollars, leave alone going abroad. Looking for that sort of money, means that what you want to get is a quality cheap houses, that are easier for anyone to get,” said Ireri.
He said the institution will also invest in offshore long-term bonds to increase its capital.
“I would not want to give details about it now, it’s too early. But we will talk much about this after the general elections, and as I had said earlier, county governments are our focus,” Ireri said.
In May this year, Housing Finance signed a Sh850 million bilateral term loan with the London-based Ghana International Bank to support the firm’s mortgage lending business.
He said continued international funding will also help the institution to come up with various products of accessing quality housing apart from taking up mortgages.
“The fear of being chained for like 20 years and especially the people whose parents had facilities in the 1990s and have seen the pain they have gone through paying… such barriers keep Kenyans away. But there are other solutions we are working on,” he added.
The firm kicked off the sale of its second tranche of its seven-year bond in October 1 to raise Sh3 billion to be used for onward lending to property developers and mortgage financing.
The offer for the second tranche which closes on October 12 is open to both individual and institutional investors.
“The reason why offshore funding is attractive is because it is cheaper and this is the main incentive. Five years ago we would not be able to raise even a million dollars, leave alone going abroad. Looking for that sort of money, means that what you want to get is a quality cheap houses, that are easier for anyone to get,” said Ireri.
During the first tranche issued in 2010, HF managed to raise Sh7 billion, and opted to accept the entire amount despite seeking a total of Sh5 billion.
Proceeds of the notes were used for various projects including provision of mortgage financing for existing and aspiring home owners, supply of residential middle and lower income housing through partnerships and joint ventures and Construction financing for all kind of property developers.
Currently, Kenya has a housing deficit with annual demand at 200,000 units per year against a supply of 50,000 units.
