Rafiki Deposit Taking Micro-finance, a subsidiary of Chase Bank, has unveiled a mortgage product targeting low-income earners.
The micro-finance lender will fund homes built using low cost technologies with prices ranging between Sh1 million to Sh3 million on loans payable over a 10-year duration.
Daniel Mavindu, the managing director at Rafiki DTM said the micro-finance will fund 100 per cent of construction costs for landowners and a further 70 per cent of the cost of land for individuals without land.
“Our aim is to empower the middle and low-income earners through tailor-made products to increase availability and access to decent and affordable homes,” Mr Mavundu said during the launch.
The mortgages will be priced at 18 per cent on a variable interest rate schedule, with buyers of the cheapest homes expected to pay about Sh19,000 for ten years.
The homes will be built by Mineco House, a local construction company, using low cost materials such as interlocking concrete blocks and light steel for trusses instead of timber,
“Using interlocking concrete blocks will ensure the houses are completed in about 30 days,” Mineco’s managing director Mate Njeru said adding that major savings will be realised by bringing the floor to the surface to avoid excavation.
Rafiki DTM Kenya becomes the latest firm to enter into the lower end segment of the Kenyan housing market after Jamii Bora and Select Africa
Early last year, Jamii Bora Bank unveiled its mortgage product targeting buyers into housing estates developed by its subsidiary, Makao. The firm has since sold over 300 home loans in its Kisaju low-cost housing project.
Select Africa, a subsidiary of African Alliance which also entered the local housing micro-finance sector last year, allows cash-constrained households to build their homes incrementally over several years with the firm providing funding and the construction technology.
