The deal that is expected to address the low cost housing units’ deficit, will now enable salaried individuals and entrepreneurs with a monthly income of at least Sh20,000 to access a micro mortgage product.
Speaking during the signing of a memorandum of understanding between the two firms, Equity Bank Group Managing Director James Mwangi said low-income earners could now afford micro mortgage credit facilities from as low as Sh48,000 to finance building construction elements, with the cheapest housing option costing about Sh195,000.
Since launching its mortgage financing product almost a year ago, Equity Bank has disbursed mortgages amounting to over Sh23 billion.
The new mortgage product will also finance the cost of purchasing pre fabricated steel frame structures from MRM for the development of low cost houses.
“Today we celebrate yet another milestone in Kenya’s banking and real estate development sector as we unveil the first of a kind micro mortgage product in conjunction with Mabati Rolling Mills,” Mwangi noted. “This partnership confirms our joint commitment to transform the lives of Kenyans through the rollout of innovative creatively designed financing solutions.”
The cost of land purchase and electricity connection at a fee of Sh35,000 by Kenya Power, will be covered under the micro mortgages as well.
In the new partnership MRM and Equity Bank, will also be scaling up a behavioural change campaign to encourage a switch from timber based roofing trusses and building beams to the adoption of more environmentally sustainable steel option developed by MRM with the ultimate benefit being forest conservation.
On his part, MRM chairman Manu Chandaria said that the current low cost housing deficit stands at an estimated 200,000 units against a current availability of less than 40,000 units.
“Kenya needs about 150,000 to 200,000 houses but we are regrettably building paltry 35-40,000 units annually,” Chandaria pointed out, adding that with Equity Bank’s support, they plan to facilitate the construction of at least 5,000 units.
These affordable housing units can be residential homes or outbuildings in urban areas, townships and municipalities and are not limited in size, design or even price.
Beyond the steel structures, MRM will also facilitate the training of fundis and artisans at the grassroots level across the counties on the skills required to erect the pre-fabricated steel structures in an initiative also geared at creating jobs.