A housing project. Saccos are targeting members with mortgages to boost
their market share in the lucrative real estate sector. File
Kiambu-based Urithi Housing Cooperative
Society has launched a Sh1 billion residential project in Kilimambogo on
the outskirts of Thika town, targeting its 6,000 members. The venture,
which will comprise 600 housing units, is funded through the society’s
cash reserves, including financing from local banks.
Under
the scheme, members contributed Sh355,000 to acquire the land and the
sacco will help them secure building loans from local lenders.
Sacco chairman Samuel Maina told the Business Daily on phone that the project seeks to equip members with decent and affordable housing.
“The
project stands on 100-acre piece of land. We started the groundwork
last month and we have given the project a timeframe of two years to be
complete. It will be named City Edge Project,” said Mr Maina.
He
added: “Urithi Housing Co-operative Society will act as collateral to
our members who want to acquire loans from the banks to develop their
plots. We are in talks with Unaitas, K-Rep Bank and Equity Bank for the
members to access loans.”
He said the first phase of
the scheme is expected to cost Sh300 million and would be completed
early next year. “The idea is to acquire more land through our members
and start income generating projects that can accelerate the growth of
the society,” he said.
The initiative comes at a time
when saccos and lenders are targeting co-operative society members with
mortgages to tap the rapid growth in the lucrative real estate sector.
Recently,
Shelter Afrique said it would target housing saccos across the country
to grow its share of the mortgage market. Shelter Afrique director of
business development and operations, Femi Adewole, said the company is
eyeing co-operatives which have acquired and allocated land to their
members, but they cannot afford to develop their property.
“We
have entered into deals with some saccos to finance development of
decent but affordable housing for their members,” said Mr Adewole.
The
financier received a Sh442 million (€3.7 million) grant from the French
Development Agency in March, for lending to microfinance institutions
and housing saccos, which will in turn give their members loans.
sciuri@ke.nationmedia.com
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