KCB partners with Developers to boost  mortgage sector

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m_KCB partners with Developers to boost  mortgage sector

With the positive outlook that is expected to bedeck the country’s future mortgage sector, Kenya Commercial   Bank-KCB is now wooing in more Developers to harness its growth pace.

The sector that is considered young   among other sectors has recently attracted a financing arm from   banks, thus sparking off competition that   has seen Banks design more innovative products.

With the promising future of the sector, Maurice Toroitich, Managing Director at KCB Rwanda  says that  partnering with  key stakeholders such as  developers  paves way for  a streamlined  growth of  the  much needed sector.

“We are providing a solution where none exists,” Toroitich said adding that the partnership will help borrowers   have houses of their choice.

This means that Bank’s clients  will now  approach developers to construct houses of their wish  as opposed to  buying  a finished  house of which  it  requires a buyer extra cost  to adjust to  their  requirements.

“So what we do is to  construct  a house to  a level  where now the  potentialborrowers form the bank can  tell us  on  how tomodify the  houseaccording to  what  they require of their dreamhouse,”  Geoffrey Byegeka, a  developer noted.

The partnership between the Bank and the Developer Geoffrey Byegeka will see the   developer constructing over 28 housing units in the Rubirizi Homes estate in Kigali and other 50 units in Kinyinya also in Kigali.

The approach is seen by experts as the best move to help the Bank boost its recent launched 100 percent mortgage which   has reshaped the thinking of banks on the mortgage financing with most banks saying it is risky to provide 100 percent financing.

But Toroitich says  mortgagefinancing    unlike  other  loan  financing has less   ‘bad loans’, something that  would  make the 100 percenteasier and possible to  increase  affordable homes for  all.

“Mortgage is rocket science,” the flamboyant Banker said “ depending on how you view life is how you  view  risk and with  our  experience as a group of over 50  years in this  business we  know  how to approach the  market.”

According to   Byegeka the housing units will be costing over Rwf 49 million and will be accessed by the bank’s clients.

As more banks now venture into mortgage financing there is optimism that the looming shortage of housing units in the country   will be slashed by   half percentages.

According to   the  housing Survey  conducted by the  City of Kigali in 2012, access  to  affordable housing in Kigali  was constrained by  low levels of mortgages  financing   with  96.2% of households in Rwanda  with no access  to  housing finance.

Economic experts believe that the key element for the sustainable growth of the country’s main trading and capital city will rely on the provision of decent housing for all.

The survey indicates that new dwellings supply in the formal market in the city    is in a range of 800 to 1,000 units annually with a quarterof the formal supply being apartments while others are detached units.

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About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

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