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The dream of a steady paycheck and a home in a decent neighborhood have become elusive for many working-class Kenyans.
And it is particularly beyond reach for low-income and minority households who have been priced out of the market.
A study done in 2014 by salary explorer found that an average salary in Kenya was Sh147,182, making it difficult for such individuals to set aside 30 percent of their earnings to comfortably service an average mortgage of Sh7.5 million, with the gap in homeownership between the rich, middle class and the poor almost as large.
Mortgage financier, Housing Finance Corporation (HFC) has come up with a new programme, targeted towards low-income earners and non-salaried to help them staircase their way to property ownership.
In a strategic re-organization of its operations, the firm has turned its sight to unbanked but prospective property owners and those with some access to financing models but are not fully satisfied with services in the market.
“After restructuring our operations, focus is now on this person who does not have a monthly income, or pay slip to confirm the same,” said HFC managing director, Sam Waweru. HFC is the banking subsidiary of HF Group.
HFC has said it is not chasing after the 3 million Kenyans with salary accounts, also targeted by over 40 players in the commercial banking space, but the vast majority of non-salaried Kenyans considered risky because they lack collateral to ease their access to credit.
The firm said in an interview yesterday that it plans to use a host of banking services such as stocks, assets, provision of insurance to fill up its SME plate to avoid direct competition with the banks.
HFC also said it will use the model as a weapon to increase its customer base as well as boost deposits in an effort to attain the tier-one banking status.
HFC intends to use the services to lure corporate firms with an annual turnover of Sh50 million to Sh1 billion, largely considered as the country’s economic boosters.
An average mortgage price has equally risen over the last three years to grow by more than Sh1 million, having risen to Sh7.5 million last year from Sh6.4 in 2012 according to a Central Bank of Kenya (CBK) mortgage survey.
HFC is also mulling a property exchange that will allow property owners to either consider disposing off their land or exchange the property locations for high value returns.