NAIROBI, December 10, 2021-Rachel Mwangangi is getting ready to move into her dream home in Kenya’s capital, Nairobi, within the first quarter of 2022. It is the culmination of a long and arduous journey for the single parent who works with one of Kenya’s county governments and solely fends for her two children ever since the demise of her husband.
For a long time, a mortgage facility that she would deem affordable had been out of her reach, with short repayment periods and double-digit interest rates locking her out. This changed when she got to know of lending through her savings and credit cooperative society, Stima Sacco, which had been enabled by onward lending courtesy of the Kenya Mortgage Refinance Company (KMRC).
“I joined a page on a social media site and I was going through it, I happened to read about a loan facility whose rates were so good. I decided to go to my sacco branch and inquire about it and the journey began with them assessing how much I earned and which institution I worked with,” Mwangangi said.
Having secured a Ksh. 4.0 million facility whose interest rate is 9.0% and the repayment period is 15 years, Mwangangi considers herself considerably fortunate when she contrasts this with the prevailing market landscape. According to the Central Bank of Kenya, the average mortgage size is Ksh. 8.6 million, the average interest rate charged is 10.9% and the average repayment period is 11.2 years.
“This is the best thing that happened to me since I was born. In this country where do you get a loan at 9.0%? I was speaking to my friend who was telling me I have been given free money. I was very excited because I had earlier just repaid a Ksh 1.5 million loan and it took me quite some time because the rate was too high,” she said.
Mwangangi’s monthly mortgage service cost is Ksh. 48,000, an increase from the Ksh. 35,000 she currently pays in rent. However, she said she is delighted that KMRC has not only enabled her to own a home but more importantly realize the quality of housing she has always desired; quality she would not have been able to enjoy had she relied on her savings only for this undertaking.