Partnership to drop mortgages
08 November 2011, 17:29
Nairobi - Equity bank and Mabati Rolling Mills (MRM) on Tuesday unveiled their partnership, to provide micro mortgages access to Kenyans to own homes for Ksh 195,000
This means that salaried individuals and entrepreneurs with a monthly income of at least Kshs 20,000, can now access a micro mortgage product designed to facilitate the erection of low cost housing units using steel structures manufactured by MRM.
Equity Bank will provide financing to customers wishing to take advantage of the high quality, cost effective and time saving building solution by MRM across its network of 172 branches countrywide.
Speaking during the signing of a memorandum of understanding between the two firms, Equity Bank Group Managing Director James Mwangi disclosed that the pioneering partnership would afford low-income earners affordable micro mortgage credit facilities from as low as Kshs 48,000 to finance building construction elements with the cheapest housing option costing about Kshs. 195,000.00.
Among other elements, the new micro mortgage product will finance the cost of purchasing pre fabricated steel frame structures from MRM for the development of low cost houses which will be quality assured. MRM will offer design services as well as ensure that high safety standards are maintained during construction.
“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.
In the new partnership MRM and Equity Bank, will also be scaling up a behavioral 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.
According to MRM Chairman Manu Chandaria, current low cost housing deficit in Kenya 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.
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.
The new micro mortgages, Mwangi disclosed, will also carry financing value add features covering the cost of land purchase and the cost of electricity connection at a fee of Kshs 35,000 by Kenya Power.
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