The ministry of Co-operatives, and Micro, Small and Medium Enterprises Development will work with Kenya Revenue Authority and Retirements Benefits Authority to facilitate the amendment of the requisite regulatory provisions to foster inclusion of SACCOs as qualifying institutions in relation to mortgage finance, the ministry said in a press release yesterday.
The move is aimed at increasing the uptake of affordable housing in Kenya. The projects earmarked to benefit from the first phase are those that have already been rolled out, like the Starehe housing project.
Read: Government Targets SACCOs to Grow Affordable Housing Uptake
Cooperatives Cabinet Secretary Simon Chelugui said in the proposed plan, Kenya Mortgage Refinance Corporation (KMRC) would provide affordable and accessible financing towards housing acquisition by offering long-term mortgage financing at fixed rates.
“We will work closely with SACCOs to identify and enter into strategic partnerships with county governments for affordable housing developments on their available lands,” said Chelugui.
KMRC will also pursue with the National Treasury the inclusion of SACCOs within the institutions whose borrowing members benefit from the mortgage relief Income Tax provisions.
The Kenya Mortgage Refinancing company (KMRC) is a non-deposit taking, public-private partnership firm whose primary mandate is to ensure sustainable home financing in the country by providing long-term funds to primary mortgage lenders (PMLs), such as banks, at low and fixed interest rates. This is done by increasing the liquidity of the Primary Mortgage Lenders thereby removing the worry of long-term mortgage funding for these institutions.
Last week, The State Department of Housing and Urban Development, and investment company Gulf Cap Africa Limited, signed a Kshs. 13-billion deal for the construction of 6,704 affordable housing units in Starehe.
The project will be done in 5 phases over a period of 36 months making it the biggest Affordable Housing Project undertaken by the Ministry this year in line with its goal to achieve the development of 200,000 housing units annually.
Housing Permanent Secretary, Charles Hinga said through the scheme his office will work on incentives not yet actualized by developing practice guidelines on tax relief and affordable housing relief such as exemption of stamp duty for first-time affordable housing homebuyers.
The initiative is a joint effort between the ministry, SACCOs, Kenya Union of Savings & Credit Cooperatives (KUSCCO), Sacco Societies Regulatory Authority (SASRA), National Co-Operative Housing Union (NACHU) and the Kenya Mortgage Refinancing Company (KMRC).
