Kenya: Koto enters US$11m housing finance deal with Jamii bank

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A US$11m contract has been signed by two companies to see construction of prefabricated houses for customers in Kenya, where a three and five-bedroom house will be priced between US$ 33,000 (Sh3 million) and US$ 88,000 (Sh8 million) respectively under mortgage loan facility.

The agreement involves Jamii Bora Bank (JBB) and Koto Housing Kenya, and the project will commence soon and see potential home owners receiving funds from the bank to implement solutions from Koto. Customers to be financed through the mortgage must have land for construction.

The mortgage loan facility is set at 18 per cent over a period of between five and 20 years.

The two companies said this was a very wise initiative that will make developers richer in that they will get to save a lot of money. This is because prefabricated houses are cheaper and quick to build. According to the two, customers will save a lot in rent by moving quickly into a finished home.

“You save time and rent. Some of our customers ask for moratoriums of between six and 12 months,” said JBB Chief Executive Sam Kimani.

Interested customers will be required to use expanded Polystyrene (EPS) panels, a technology that is widely used in Malaysia and other South East Asian countries.  Koto Housing, a company based in Mavoko manufactures these building materials and puts up houses for customers.

Prefabricated house technology not only lower costs and prevent wastage of construction materials; it also allows faster build times throughout the year regardless of the weather.

The house construction agreement will be helpful to the middle and lower economies. Africa is experiencing a booming expansion in middle-level economy, pushing higher demand for housing. Kenya Housing Finance, a housing mortgage financier also said last year that it would invest US$ 11.2m in a housing project.