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Kenya

Cheap mortgage for civil servants

NAIROBI, May 6 – The Ministry for Housing and mortgage firm Savings and Loans Kenya (S&L) have signed a Sh600 million agreement to provide mortgage facilities for civil servants.

Housing Minister Soita Shitanda said Tuesday that under the agreement, civil servants would get mortgage facilities of up to 90 percent of the value of the property at an interest rate of five percent per annum.

Shitanda revealed that a maximum of Sh5 million would be lent to an individual though the facility and would be dependant on individual capabilities.

He said his ministry was taking a lead as an employer in providing housing for its employees as proposed in the Housing Bill, which should be presented in Parliament in a few months time.

“The civil servants Housing Fund Scheme set up in 2004 has so far sold 1,409 houses,” said the Minister.

Speaking during the signing ceremony, KCB Group Chief Executive Officer (CEO) Martin Oduor-Otieno said the mortgage subsidiary S&L was an ideal partner for the government, as it offered tailor-made products and services to meet the needs of the market.

“We have waived most of the internal costs to make the facility attractive to more civil servants, who would then only meet costs in respect of external parties,” he stated.

Oduor-Otieno said the agreement was made possible by the fact that the government had subsidised the new facility, making it possible for the bank to offer loans at such low interest rates.

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Meanwhile, Shitanda said his ministry is trying to address the housing shortage problem in the country by getting into private-public partnerships.

“We recently advertised for people with land to partner with us in providing land for affordable housing,” he said.

“The government has blamed the private sector for overcharging, while the private sector is blaming the government for overtaxing.”

The Minister noted that the agreement was first of its kind but promised that the ministry would be partnering with more private entities to make the dream of access to affordable homes a reality for all Kenyans.

He stated: “We want this to change by thinking ‘out of the box’ through these partnerships.”

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