, NAIROBI, Kenya, Dec 15 – The National Housing Corporation (NHC) is set invest Sh200 million to supplement construction of individual permanent residential houses in rural areas.
The financial assistance will be in the form of loans, which will be secured on first charge of the property being offered as security.
Loans will be advanced at an interest rate of 13 percent on reducing balance method with the maximum repayment period for the loan in 10 years.
NHC Managing Director Henry Maina says the decision to focus on rural lending is due to the growing potential of rural areas as a result of devolution and infrastructure development.
“The corporation plans to develop 1,000 units per year based on rural housing loans. As the amount on disbursement increases, the units developed will increase to over 2,000 units. This target can be attained by making information on rural housing available to Kenyans and at the same time work hand-in-hand with County Governments,” said Maina.
The corporation has planned to increase the Sh200 million loan facilities to Sh600 million in three years based on the demand for the loans.
“Rural and peri-urban housing has grown over the past few years with infrastructure development expanding into the counties. This has made most Kenyans venture more into home construction in peri-urban areas. This is why we are pushing for financing of home projects in these areas,” Maina added.
The country is grappling with a huge housing deficit in urban and rural areas currently estimated at 200,000 and 350,000 units respectively.
The housing shortage coupled with difficulties in accessing serviced land stimulates slums and informal settlements in most parts of the country.
The high cost of construction and expensive cost of finance has made delivery of affordable housing a challenge to the majority of low and middle-income earners.