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KMRC: Home Ownership for the Kenyan Diaspora · The Mwango Capital Podcast

0:00
SPEAKER_02: Ladies and gentlemen, welcome to another edition of Morongo Spaces.
0:03
SPEAKER_02: We have a topic on affordable housing solutions for the Kenyan diaspora.
0:07
We have three able speakers who are going to guide us through
0:09
this very interesting topic.
0:10
SPEAKER_02: Let's start with Flora.
0:12
SPEAKER_02: And maybe Flora, you can introduce yourself and where you work at.
0:14
SPEAKER_02: And then, hey, Stella can go after you.
0:17
SPEAKER_02: And then Shadrach, if you'll have joined us.
0:19
Tell us a bit about what you do and what you do in regards to
0:22
affordable housing solutions.
0:24
SPEAKER_01: Thank you so much, Mokaya.
0:26
SPEAKER_01: My names are Flora Naitore Muthaora.
0:29
I work for Kenya Mortgage Refinance Company in the capacity of
0:33
Head of Risk and
0:34
Compliance and also supporting the company to implement
0:38
sustainability ESG.
0:39
SPEAKER_02: What's been your journey to KMLC?
0:42
SPEAKER_01: I'm clocking four and a half years.
0:43
I joined KMRC in the year June 2020 when the company was
0:49
setting up and it was a
0:51
SPEAKER_01: time when it had not received its license.
0:54
My main task at the time was really to support the company in
0:58
having the right
0:59
policies in place as per the regulatory requirements and really
1:03
working hand in
1:03
SPEAKER_01: hand with the rest of the team to ensure that
1:06
SPEAKER_01: we get an operating license.
1:08
SPEAKER_01: It's been smooth all the way.
1:10
SPEAKER_01: A bit of hurdles here and there, just like any other organization.
1:13
SPEAKER_01: When we got our license,
1:15
we embarked on a lot of capacity building for the market and
1:19
basically just
1:20
creating awareness about this new outfit that is coming to
1:24
create a disruption in
1:25
SPEAKER_01: affordable housing.
1:27
SPEAKER_01: It was the first in the market,
1:29
a company offering fixed long-term liquidity to financial
1:32
institutions and also
1:34
SPEAKER_01: being aligned with the government mandate of affordable housing.
1:38
We had quite a journey to create that market trust that it's a
1:42
product that will
1:43
SPEAKER_01: work and it's actually available for all Kenyans to access.
1:47
SPEAKER_01: So since 2021,
1:48
we were able to do our first disbursement around February 2022
1:53
to four financial institutions.
1:56
And from there,
1:57
it's been really more of partnering with these primary mortgage lenders.
2:02
These are banks and circles to be able to create that awareness
2:06
and of course,
2:06
SPEAKER_01: extend these financing to Kenyans to enable them to own homes.
2:10
SPEAKER_01: It's really been an exciting journey and I think it's been fruitful.
2:15
It's really fruitful and rewarding when you get to create that
2:19
impact in the market
2:20
SPEAKER_01: of enabling Kenyans to own homes.
2:22
So that has been my journey in KMRC and we continue to progress
2:26
further to
2:27
implement various initiatives as we see the company take on the
2:31
next stage of growth.
2:33
We've moved from the nascent stage where we have to set up the
2:36
company and operationalize it.
2:38
SPEAKER_01: Now we are moving to the growth stage.
2:40
It's been an exciting journey for me and I'm really looking
2:43
forward to more
2:44
SPEAKER_01: initiatives ahead as we continue to develop the market.
2:47
SPEAKER_01: Thank you.
2:48
SPEAKER_01: Stella.
2:48
SPEAKER_01: Maybe you could introduce yourself.
2:50
SPEAKER_01: Thank you.
2:50
SPEAKER_01: Thank you, Mokaya.
2:51
SPEAKER_01: Good evening.
2:52
SPEAKER_01: Good morning from where you are tuned in.
2:54
Glad to be here this evening,
2:55
unpacking the home ownership journey in the diaspora.
2:59
SPEAKER_01: So my name is Stella Mutai, head of mortgage business at HFC.
3:02
SPEAKER_01: I have experience in real estate lending and diaspora banking.
3:07
I'm responsible for building a profitable mortgage business
3:09
that offers the best
3:11
SPEAKER_01: solution in the market to our customers,
3:13
SPEAKER_01: both locally and in the diaspora.
3:14
This has been exciting for me because when you find that as
3:17
somebody is owning a
3:18
SPEAKER_01: home and a home is a very emotive product,
3:21
SPEAKER_01: it gives me joy to be able to see someone moving into their house.
3:25
This background that I'm actively involved in supporting
3:28
diaspora customers as well
3:30
SPEAKER_01: as the local companies back home.
3:32
When we say diaspora customer,
3:33
a diaspora customer is anyone who is outside Kenya.
3:36
SPEAKER_01: It could be in Africa, in the African country.
3:39
SPEAKER_01: It could be in the U.S., Asia, or wherever you are.
3:41
At HFC,
3:42
we are able to support you to be able to own a property back home.
3:46
SPEAKER_02: Thank you.
3:49
So perhaps I'll proceed a bit to the two speakers we have,
3:52
and then I'll come back to you.
3:53
SPEAKER_02: Seems like you're having challenges connecting.
3:55
SPEAKER_02: Slow now, back to you.
3:57
SPEAKER_02: You could tell us a bit about some of the affordable housing solutions.
4:00
SPEAKER_02: I know you talked about the four-year journey that you've been on,
4:03
and to imagine that you've been in one place for four years
4:05
must be a good place to
4:06
SPEAKER_02: work at.
4:07
You can tell a bit about the features of the affordable housing
4:09
solutions that you
4:10
SPEAKER_02: offer at KMRC.
4:11
It's really good to educate the public on who KMRC is in the
4:15
first place.
4:16
So the company's primary mission is mainly to provide
4:20
affordable long-term funding
4:22
SPEAKER_01: to financial institutions.
4:24
SPEAKER_01: It is also a financial institution itself and it's non-deposit taking.
4:29
SPEAKER_01: So when you compare it to a bank,
4:31
SPEAKER_01: we don't take deposits,
4:33
SPEAKER_01: but we are regulated by the Central Bank of Kenya.
4:36
The main objective was mainly to support banks to be able to
4:41
access long-term funding.
4:43
SPEAKER_01: Previously,
4:44
SPEAKER_01: home ownership in Kenya was such a distant dream for many,
4:48
SPEAKER_01: and particularly the average Kenyan who's looking to buy or build a home.
4:53
SPEAKER_01: When mortgages were actually there,
4:55
SPEAKER_01: they were quite expensive in terms of variable interest rates.
4:59
You could find a situation like right now the unsecured rates
5:03
are going up with the
5:04
SPEAKER_01: CBR being revised.
5:06
SPEAKER_01: And when the CBR is revised downwards,
5:09
SPEAKER_01: you find that there's a bit of time before the rates go down.
5:14
SPEAKER_01: were actually operating the same way.
5:17
So KMRC came now to create that disruption and address that
5:21
need in the market of
5:23
providing long-term funding to these financial institutions to
5:28
be able to extend
5:29
SPEAKER_01: the same to Mwanaichi.
5:31
As opposed to previously where banks relied heavily on
5:34
short-term deposits,
5:35
SPEAKER_01: they now have access to long-term funding.
5:38
And this funding is actually fixed for the entire duration of
5:42
the loan that we give them.
5:43
So the same is extended to borrowers and also single digit
5:48
interest rates.
5:49
SPEAKER_01: The funding we get is from development financial institutions,
5:53
SPEAKER_01: and it's actually a sovereign debt.
5:56
SPEAKER_01: And this is intentional.
5:58
It was negotiated by the government in order to make it
6:01
affordable to KMRC and
6:03
SPEAKER_01: eventually to primary mortgage lenders.
6:06
SPEAKER_01: We get this funding at 4.5%.
6:09
We add our margin,
6:11
just 0.5%,
6:11
and we're able to extend this to financial institutions at 5.6%.
6:16
And when you look at the different products that the financial
6:19
institutions have created,
6:20
SPEAKER_01: they actually range from 9% to 9.5%.
6:24
SPEAKER_01: This is something that was not there before,
6:27
SPEAKER_01: and it's very affordable considering that it's extended up to 25 years.
6:32
SPEAKER_01: The good thing about it,
6:34
SPEAKER_01: the interest rate is also fixed,
6:35
SPEAKER_01: so it gives the borrower the predictability of income.
6:39
SPEAKER_01: So as opposed to before where interest rates were variable,
6:43
SPEAKER_01: today when you take a mortgage rate,
6:45
SPEAKER_01: for example,
6:46
SPEAKER_01: housing finance company for $2 million,
6:49
SPEAKER_01: for example,
6:51
SPEAKER_01: You're able to pay around $20,000 for your home,
6:56
SPEAKER_01: and that $20,000 is fixed for the entire duration.
6:59
SPEAKER_01: So you're able to even do your financial planning more prudently,
7:03
SPEAKER_01: knowing that your home is already catered in terms of monthly repayments.
7:08
So we operate by refinancing the mortgage portfolios that the
7:11
primary mortgage
7:12
SPEAKER_01: lenders advance to borrowers and all our lending is collateralized.
7:17
And that's why we really take a low margin to be able to pass
7:21
that benefit to the
7:22
SPEAKER_01: ultimate borrower.
7:24
So this approach has really enhanced liquidity in the housing
7:28
finance market,
7:29
SPEAKER_01: making home ownership more affordable to Kenyans.
7:32
I want to double click on two terms that you've used,
7:35
refinancing and collateralized.
7:37
So perhaps you can explain to a Kenyan what those two terms
7:40
mean in the context of KMRC.
7:43
Refinancing means that when HF comes for funding today,
7:48
we'll ask if it's $1 billion funding.
7:51
Housing Finance Company is actually going to give us mortgages
7:55
worth $1 billion.
7:57
SPEAKER_01: So we refinance those mortgages.
7:59
The bank will issue mortgages to Kenyans and then bring that
8:03
portfolio to KMRC to refinance.
8:05
SPEAKER_01: Ultimately,
8:06
we are just providing liquidity to the primary mortgage lender
8:10
in order to enable
8:11
them to extend the same and also addressing that gap of
8:16
mismatch where they would
8:17
SPEAKER_01: previously use short-term deposits.
8:19
So that has been addressed through the long-term funding that
8:22
KMRC provides to
8:24
SPEAKER_01: primary mortgage lenders.
8:26
SPEAKER_01: The collateralized,
8:27
SPEAKER_01: it means that this portfolio,
8:29
SPEAKER_01: which we are taking from the bank,
8:32
SPEAKER_01: it's actually assigned to KMRC.
8:34
SPEAKER_01: So we hold it in trust as we extend the funding now to the bank.
8:40
SPEAKER_01: So the bank retains the title.
8:42
SPEAKER_01: So the collateral is basically assigned.
8:45
SPEAKER_01: It means that we lend against collateral.
8:47
It's the same concept for mortgage where the bank lands against
8:51
the property which
8:52
SPEAKER_01: they are financing.
8:54
And until you finish paying for that property is when the bank
8:58
discharges the
8:59
SPEAKER_01: property back to you.
9:00
SPEAKER_01: It adopts the same principle.
9:03
SPEAKER_02: Stella, HF does work with KMRC.
9:05
SPEAKER_02: So maybe you can start by telling us a bit about HF.
9:08
SPEAKER_02: You've been in the news lately with the rights issue.
9:10
You can tell us a bit about HF themselves and a bit about their
9:14
journey and what
9:14
SPEAKER_02: your relationship is with KMRC.
9:17
SPEAKER_01: Thank you.
9:18
SPEAKER_01: Thank you Mokail for that.
9:19
And maybe what I can be able to start off is that HF group was
9:22
formed in 1965 with
9:23
the aim of supporting indigenous Kenyans to be able to own
9:27
desert homes and access facilities.
9:30
We have three subsidiaries and that's where the bank sits,
9:33
which is now HFC.
9:34
SPEAKER_01: So HFC now is an institution that deals actively with PMRC.
9:39
HFC was the first institution to access the money from Kenya
9:43
Mortgage Refinance Company.
9:45
We were the first institution to be able to develop an
9:47
affordable housing loan that
9:49
SPEAKER_01: we are lending to our customers.
9:52
SPEAKER_01: And one of our purposes is to be able to enrich lives.
9:54
That's why we were able to quickly develop this product to be
9:57
able to support as
9:58
SPEAKER_01: many to be able to own homes.
10:00
SPEAKER_01: And also now looking at also with our history where we are coming from,
10:05
We were formed mainly to be able to support Kenyans to be able
10:07
to own properties.
10:08
SPEAKER_01: So that's quick to adopt the affordable housing agenda.
10:11
SPEAKER_01: And you note that how Kemah was born in 2017,
10:14
SPEAKER_01: 2018,
10:14
whereby the previous government came up with the affordable
10:18
housing agenda.
10:19
SPEAKER_01: And with the affordable housing agenda,
10:20
SPEAKER_01: also they went ahead to ask themselves,
10:22
SPEAKER_01: how do we support Kenyans?
10:24
And one of the challenges has been that many people want to be
10:27
able to own homes,
10:28
SPEAKER_01: but the interest rate becomes a hydrant for someone to be able to own a
10:32
SPEAKER_01: property.
10:33
SPEAKER_01: So that's how now KMRC,
10:35
SPEAKER_01: Kenya Mortgage Finance Company,
10:36
SPEAKER_01: was launched to be able to extend concessional rates to Kenyans,
10:40
SPEAKER_01: as many Kenyans as possible,
10:42
SPEAKER_01: to be able to own homes.
10:43
SPEAKER_01: And what we've been able to do,
10:45
we support our customers to be able to match that rent that
10:49
they have been paying
10:50
SPEAKER_01: to be able to pay to a mortgage.
10:52
You'll notice that sometimes when you pay a rent,
10:54
that house is not yours.
10:56
SPEAKER_01: But by maybe,
10:57
SPEAKER_01: actually,
10:57
SPEAKER_01: the instance whereby you pay a mortgage,
10:59
SPEAKER_01: at the end of it,
11:00
SPEAKER_01: all the house becomes yours and you know that a property appreciates.
11:03
So that was the genesis and that's how we came about developing
11:07
this exciting product.
11:08
SPEAKER_01: And with the journey ahead at HF Group,
11:10
we are looking at exciting solutions to our customers because
11:13
we're in a growth trajectory.
11:16
SPEAKER_02: Thank you.
11:16
Shadrach was to give us the perspective of SACOs and how they
11:20
have a relationship with KMRC.
11:22
SPEAKER_02: Seems like we're having a bit of challenges with Shadrach.
11:26
SPEAKER_02: So I'll come back to Flo.
11:28
SPEAKER_02: So in terms of KMRC and the loans they provide in terms of refinancing,
11:33
SPEAKER_02: what are some of the requirements that you need for people and a bit of a
11:37
SPEAKER_02: step-by-step process in terms of applying for loan to KMRC?
11:40
SPEAKER_02: So if I want a loan, what do I do and what do I need?
11:44
We have different eligibility requirements for the primary
11:47
mortgage lender and also
11:49
SPEAKER_01: for the end user.
11:50
SPEAKER_01: I'm speaking more specifically to the borrower, to the end borrower.
11:54
SPEAKER_01: And I just mentioned that you have to be a Kenyan citizen,
11:57
SPEAKER_01: whether you're residing in country or abroad.
12:00
SPEAKER_01: And when you buy the house, it has to be owner-occupied.
12:03
SPEAKER_01: We don't have any limits on the income.
12:06
SPEAKER_01: However, we have capped the loan limits.
12:10
SPEAKER_01: to 10.5 million.
12:11
SPEAKER_01: And this is across the country.
12:14
SPEAKER_01: The repayment period is up to 25 years.
12:17
And we even encourage the PML to support Kenyans by advancing
12:22
them financing of up to 105%.
12:25
SPEAKER_01: So when we talk about the loan to value ratio,
12:28
SPEAKER_01: We do accept refinancing of up to 105%,
12:30
and this is mainly to support Kenyans who are not able to put
12:35
up that down payment
12:37
SPEAKER_01: or afford the fees that come about with getting a mortgage,
12:41
SPEAKER_01: like the legal fees and the stamp duty.
12:43
SPEAKER_02: Stella,
12:44
SPEAKER_02: so in terms of diaspora,
12:46
SPEAKER_02: what are some of the concerns when you deal with people in diaspora?
12:49
SPEAKER_02: What are some of their concerns about getting homes in Kenya?
12:52
You have that nice meme of someone from diaspora sending money
12:56
and they're being
12:57
SPEAKER_02: told very often that their house is being constructed.
12:59
SPEAKER_02: And then when they come back home,
13:00
SPEAKER_02: the reality is very different from what they had in the imagination.
13:04
So what are some of the challenges that you've seen in terms of
13:07
Kenyans in diaspora,
13:08
SPEAKER_02: in terms of owning homes in Kenya?
13:10
SPEAKER_01: I know for diaspora customers, it's a number of them.
13:13
They have been called and seen that Niamh that talked about the
13:16
diaspora customers.
13:17
SPEAKER_01: And not only even for diaspora customers,
13:19
SPEAKER_01: even for the locals,
13:19
SPEAKER_01: they need to be aware about the full property ownership journey.
13:23
SPEAKER_01: Sometimes it tends to be complex.
13:25
SPEAKER_01: However, it's important for one to be able to understand the full
13:28
SPEAKER_01: process.
13:28
So for us and what we do and maybe what I recommend from where
13:32
I sit is for one,
13:33
it's critical for you to be able to conduct a due diligence on
13:36
the property.
13:36
SPEAKER_01: To confirm one, the property is on riparian land.
13:39
SPEAKER_01: Riparian is well, but maybe the property is near a water body.
13:43
SPEAKER_01: Confirm is this property is near a public land on a road reserve.
13:46
And I also need to ensure that we're able to conduct a search
13:49
of this property to
13:50
SPEAKER_01: be able to understand that who are the owners?
13:52
SPEAKER_01: What's the history of this property?
13:53
And then that thing that we encourage our diaspora customers
13:56
also to have some of
13:56
SPEAKER_01: the pitfalls that we try to advise them to avoid,
13:59
SPEAKER_01: but they conduct a search to confirm if there are any encumbrances.
14:03
SPEAKER_01: When we're talking about encumbrances,
14:04
SPEAKER_01: we want to be able to know,
14:06
SPEAKER_01: is there any caution on that property?
14:08
SPEAKER_01: Is there any caveat on that property?
14:10
SPEAKER_01: Has this property been transferred to the rightful owner?
14:13
SPEAKER_01: So it's important one to be able to conduct a due diligence.
14:16
And how we support our diaspora customers is providing them a
14:19
panel of lawyers and
14:21
SPEAKER_01: lawyers to be able to support them in conducting all these searches,
14:24
SPEAKER_01: to be able to go through the land registry,
14:26
SPEAKER_01: to be able to confirm that this property has a dozen encumbrances,
14:30
SPEAKER_01: or even to be able to confirm on the ownership.
14:32
SPEAKER_01: The other thing that we've noted is that a number of our customers,
14:35
SPEAKER_01: both local as well as diaspora customers,
14:37
SPEAKER_01: they do not engage professionals.
14:38
SPEAKER_01: It's imperative to be able to engage professionals.
14:41
The professionals I'm talking about,
14:42
I'm talking about a lawyer,
14:44
I'm talking about a badwa.
14:45
SPEAKER_01: I'm talking about if you're buying a piece of land,
14:48
SPEAKER_01: have you confirmed on the beacons of the property?
14:50
SPEAKER_01: We've seen customers buying a property and when they go to construct,
14:54
SPEAKER_01: they construct on their neighbor's property,
14:56
SPEAKER_01: noting that they had not known where
14:58
the actual location,
14:59
then that thing is,
15:00
it's always visit this property.
15:02
If one is able to spare some time to come in the country or
15:05
even to have a trusted
15:06
SPEAKER_01: partner like HFC.
15:08
SPEAKER_01: At HFC,
15:08
SPEAKER_01: what we do is,
15:10
and to be able to maybe to support our customers is we have our
15:14
mindset that we are
15:15
SPEAKER_01: selling through one of our subsidiaries.
15:17
SPEAKER_01: And also we partner with reputable developers.
15:20
When our customers are buying these properties,
15:22
are buying the right deal in the market.
15:24
Then the other pitfall that I've seen in the market and that
15:27
one that needs to
15:28
SPEAKER_01: avoid is you need to avoid being in a rush chasing a property.
15:32
SPEAKER_01: You know that a property is not a fast moving consumer good.
15:35
SPEAKER_01: You need to conduct a search of this property to understand everything,
15:38
SPEAKER_01: the location,
15:39
SPEAKER_01: the map and all that.
15:41
Then the other thing that I've seen is engaging a reputable
15:43
developer and not
15:45
SPEAKER_01: engaging a reputable developer in
15:46
The other thing I've also seen is that if this property is
15:49
developed or is a
15:49
SPEAKER_01: property under construction,
15:51
SPEAKER_01: you've not confirmed if the property has the right documentation.
15:54
Some of the right documentation is that you need to be able to
15:57
know developers
15:58
SPEAKER_01: submit these developed approvals.
16:00
Do they submit to the county governments to ensure that these
16:02
are approved?
16:03
SPEAKER_01: And what we have done at HFC or at HF Groups
16:07
is to ensure that we are offering a one-stop shop whereby a
16:10
customer can come in
16:11
and they view some of the properties we have at our subsidiary
16:14
as well as the ones
16:15
we have partnered with some of the reputable developers able to
16:18
come in view and
16:20
SPEAKER_01: choose the property they are interested in.
16:22
We have properties that are in the towns or in the major cities
16:26
and all these
16:26
SPEAKER_01: properties you'll note that as HFC because we have all of our
16:30
SPEAKER_01: petition,
16:30
we ensure that we have done a certain due diligence and even
16:33
going through the land
16:35
SPEAKER_01: registry to be able to confirm the search,
16:37
SPEAKER_01: the ownership,
16:38
SPEAKER_01: and even to ensure that we have the right documentation.
16:41
SPEAKER_01: It's imperative anytime that you're buying a property,
16:44
SPEAKER_01: ensure that you engage a reputable developer,
16:47
SPEAKER_01: due diligence,
16:48
SPEAKER_01: don't be in a rush,
16:49
SPEAKER_01: engage professionals.
16:50
SPEAKER_01: We have lawyers, we have valuers.
16:53
Like at HFC,
16:53
we have a panel of lawyers and valuers that we work closely with.
16:56
SPEAKER_01: And even we ask customers
16:57
They're not comfortable at the initial stages using the bank's
17:01
lawyers and the
17:01
SPEAKER_01: bank's panel of valuers.
17:03
You can come in with your lawyer and your lawyer is able to
17:06
conduct the unified
17:07
SPEAKER_01: searches to be able to confirm that this property is clean.
17:10
So those are some of the pitfalls as well as some of the
17:12
solutions that we have at
17:13
HFC to support customers in property ownership and to ensure
17:17
they're buying the
17:17
SPEAKER_01: right property.
17:19
As you can tell,
17:19
a lot of Kenyans try to avoid the professionals because Najwa
17:23
am too slutty.
17:24
SPEAKER_02: And then they end up in a lot of trouble.
17:25
SPEAKER_02: Very well put that the importance of moving on professionals.
17:29
SPEAKER_02: Do you agree, Stella?
17:30
SPEAKER_01: Maybe I can concern that on engaging professionals.
17:33
I've seen that property is the most expensive investment you'll
17:36
ever make in life.
17:37
And social property is the most expensive investment you'll
17:40
ever make in life.
17:41
SPEAKER_01: It's good to be able to spend on that cost.
17:43
SPEAKER_01: The cost might be high.
17:44
SPEAKER_01: However, when you're able to spend a little bit on that,
17:47
SPEAKER_01: It saves you a lot in the long term.
17:49
SPEAKER_01: In the short term,
17:50
SPEAKER_01: it might be expensive,
17:51
SPEAKER_01: but in the long term,
17:52
SPEAKER_01: it will be able to pay nothing that,
17:53
SPEAKER_01: yes,
17:54
SPEAKER_01: if you are constructing,
17:55
SPEAKER_01: you paid an architect,
17:56
SPEAKER_01: you paid a quantity surveyor,
17:57
SPEAKER_01: an architect comes up with the concept that you as a customer,
18:01
SPEAKER_01: you have in mind.
18:02
And a quantity surveyor is someone who comes up with how much
18:04
each house will cost.
18:06
SPEAKER_01: If you're able to pay for this profit,
18:07
SPEAKER_01: professionals, it will go a long way in saving new costs in future.
18:12
And then it also serves as what you have been seeing whereby
18:15
we've seen buildings collapsing.
18:16
SPEAKER_01: Some of those developers that we've seen development collapse,
18:20
SPEAKER_01: make shortcuts by not engaging professionals.
18:23
SPEAKER_01: So it's good to be able to pay and you'll get a good deal in the market.
18:27
SPEAKER_02: Flo, back to you again on the requirements.
18:29
Perhaps you can pick them slowly and then people can be able to
18:32
understand exactly
18:33
SPEAKER_02: if people want their mortgage to be financed by KMRC,
18:37
SPEAKER_02: what they need to have at hand to make sure that they can tick the boxes.
18:41
Ideally,
18:42
you must be a Kenyan citizen for you to access the KMRC mortgage.
18:47
We don't encourage foreigners because this is a product that is
18:50
purely structured
18:52
SPEAKER_01: for the Kenyan citizen,
18:53
SPEAKER_01: whether you're residing in country or abroad.
18:56
SPEAKER_01: Income verification, initially we had capped the income to $200,000.
19:01
SPEAKER_01: However, just recently we removed that requirement.
19:04
SPEAKER_01: So it's actually available to any Kenyan no matter the size of income.
19:09
SPEAKER_01: And it's also available to whether you're employed or unemployed,
19:13
SPEAKER_01: both for the formal and the informal sector.
19:16
SPEAKER_01: This product was actually structured to promote home ownership.
19:21
SPEAKER_01: So we normally advocate that it has to be a residential unit.
19:25
SPEAKER_01: You may allow your relatives to reside in that house,
19:28
SPEAKER_01: which is still a form of encouraging your relatives to own homes.
19:33
For the property value,
19:34
the maximum value has been capped at 10.5 million shillings.
19:39
And this is mainly intentional because initially mortgages were
19:43
really a preserve
19:44
SPEAKER_01: of the high income and the middle upper income people.
19:47
So in order to push financing down market,
19:51
we capped the loan limit to 10.5 million shillings.
19:55
SPEAKER_01: So for any house that you identify that you'd like to buy,
19:58
SPEAKER_01: it has to be within the limit of 10.5 across the country.
20:02
SPEAKER_01: The repayment period is up to 25 years.
20:05
So considering that we have a wide array of financial
20:09
institutions providing this product,
20:11
SPEAKER_01: you'll find there are some offering 20,
20:13
SPEAKER_01: others 25.
20:14
And of course,
20:14
this one is dependent on your retirement age,
20:17
which is 60 years.
20:18
SPEAKER_01: So if you're 50 years today, you can only get a mortgage of 10 years.
20:23
SPEAKER_01: If you're 40 years, you can get 20 years.
20:25
SPEAKER_01: The limit, of course, is dependent on your retirement age.
20:28
SPEAKER_01: However, the repayment period stretches up to 25 years.
20:33
SPEAKER_01: The interest rate is single digit,
20:35
SPEAKER_01: and that's our value proposition,
20:37
SPEAKER_01: and it's fixed for the entire duration of the mortgage.
20:41
SPEAKER_01: So no matter how the economy is,
20:43
SPEAKER_01: I think just recently we've come out of a very volatile environment,
20:48
SPEAKER_01: which was characterized by different macroeconomic changes,
20:51
SPEAKER_01: which tend to have an effect on interest rates.
20:54
SPEAKER_01: The best part about the KMRC loan, it's fixed for the entire duration.
20:59
It doesn't matter whether these changes come about or that the
21:02
CBR goes up again.
21:04
The interest rate you get today when you go to HFC will be
21:07
fixed for the entire duration.
21:09
And that is really important because you have predictability of
21:14
your repayment and
21:15
SPEAKER_01: you don't have to worry about your repayment going up.
21:19
SPEAKER_01: And we've seen a lot of uptake as a result of these.
21:21
SPEAKER_01: The loan to value,
21:22
we aim to support Kenyans fully and we do understand their
21:26
economic challenges,
21:27
which may prohibit you from getting either a down payment that
21:31
was previously
21:32
SPEAKER_01: requested for.
21:33
So we even tend to support our financial institutions by
21:36
encouraging them.
21:37
SPEAKER_01: to increase the loan-to-value ratio, which we accept up to 105%.
21:41
And this is mainly to cover the costs that are mainly
21:46
associated with processing a mortgage.
21:49
And these are,
21:50
for example,
21:50
like the legal fees,
21:52
the valuation fees,
21:53
the stamp duty.
21:54
SPEAKER_01: We know the stamp duty is such a huge cost to a borrower,
21:57
SPEAKER_01: and it's normally 4% or 2%,
22:00
SPEAKER_01: depending on your locations.
22:02
SPEAKER_01: So to cover those exorbitant fees,
22:04
SPEAKER_01: which may not be a preserve of the borrower,
22:07
the financial institution can actually support the end borrower
22:11
in that home
22:12
SPEAKER_01: ownership journey.
22:14
SPEAKER_01: The property has to be a clean title.
22:16
It should not be encumbered and the minimum unexpired lease
22:20
should be 40 years.
22:22
SPEAKER_01: And of course we do advocate that it has to be insured.
22:25
And this one is just a normal cost of any mortgage that is
22:28
processed by any
22:29
SPEAKER_01: financial institution.
22:31
So we have a wide array of financial institutions that you can
22:34
choose from.
22:35
SPEAKER_01: We have 11 circles.
22:36
SPEAKER_01: We have eight banks.
22:38
SPEAKER_01: We have one microfinance institution.
22:40
And just recently,
22:41
we even opened it up to include additional financial institutions.
22:45
SPEAKER_01: So wherever you're banking or if you're in a circle,
22:49
SPEAKER_01: please approach them and ask them,
22:51
SPEAKER_01: are you participating in this KMRC product offering?
22:55
SPEAKER_01: And if they're not,
22:55
please visit our website and get to see the member institutions
22:59
who are currently providing.
23:00
SPEAKER_01: these camera scenes products.
23:02
SPEAKER_02: I want to make one small query that you often get,
23:05
SPEAKER_02: and I've seen a question like that on the timeline.
23:08
SPEAKER_02: Single digit, how do they manage this?
23:10
SPEAKER_02: What is the trick here?
23:11
Are they getting me in at a lower rate and then they hide it at
23:14
some point?
23:15
SPEAKER_02: So that's a concern.
23:16
SPEAKER_02: Kenyans are used to being tricked.
23:18
SPEAKER_02: So they are wondering, are single digit rates actually possible?
23:22
SPEAKER_02: What's your response to that?
23:23
SPEAKER_01: That's a very good question,
23:25
SPEAKER_01: Mukaya,
23:25
SPEAKER_01: because we've actually received a lot of questions from the market,
23:29
SPEAKER_01: still not believing,
23:30
SPEAKER_01: is this single-digit mortgage available?
23:33
So how we've been able to achieve it is through the sources of
23:37
funds that we have.
23:38
SPEAKER_01: We get funds from development finance institutions,
23:41
SPEAKER_01: and this is World Bank and African Development Bank.
23:44
And I'm sure you're aware that these DFIs don't lend to
23:48
financial institutions directly.
23:50
SPEAKER_01: So it's actually a sovereign debt.
23:52
SPEAKER_01: It was negotiated on our behalf by the government of Kenya,
23:56
SPEAKER_01: and we are able to access that debt through the National Treasury.
24:00
SPEAKER_01: We accessed the debt at 4.5,
24:02
and we were able to add a margin of 0.5 and extend to HFC and
24:09
Simasako at 5%.
24:11
SPEAKER_01: And of course,
24:12
to also enlarge the scope of funding that we have because we
24:16
want to increase the
24:17
resources that we have so that we can make the business
24:20
sustainable and also do it
24:22
SPEAKER_01: for the long haul.
24:24
We actually went to the capital markets early in 2022 and
24:28
raised the corporate bond.
24:29
SPEAKER_01: And as a result of that,
24:31
SPEAKER_01: and considering that corporate bonds,
24:32
SPEAKER_01: of course,
24:33
SPEAKER_01: come at a certain price,
24:35
SPEAKER_01: Since they are benchmarked against the treasuries,
24:38
we adopted a blended form of financing so that we can enlarge
24:43
the scope of funds
24:43
SPEAKER_01: that we have.
24:44
SPEAKER_01: Ideally, we have concessional funding at 4.5.
24:48
SPEAKER_01: Then we have our corporate bond at 12.5.
24:51
And blending these two resources,
24:54
we are able to reduce our weighted average cost of capital.
24:58
SPEAKER_01: So it slightly increased to 5.1.
25:02
And as a result of that,
25:03
we increase the cost that you are lending to PMLs from 5 to 5.6.
25:07
SPEAKER_01: So yes,
25:08
it's achievable because the financial institutions are getting
25:12
concessional funding
25:13
SPEAKER_01: from PMRC.
25:15
And this concessional funding is fixed for the entire duration
25:19
that you are
25:20
SPEAKER_01: providing to the financial institution,
25:23
SPEAKER_01: enabling them to pass on the same benefits to the end borrower.
25:28
SPEAKER_01: So it's a disruption in this market.
25:30
It's the first product of its kind in this market and it's
25:34
available to Kenyans to
25:35
SPEAKER_01: actually tap into these resources and buy homes.
25:38
So yes,
25:39
it's actually a possibility and that's the way we are achieving it.
25:43
SPEAKER_02: I'll come to you on the step-by-step process.
25:45
SPEAKER_02: Let me give you a bit of a break.
25:46
SPEAKER_02: Shandrak, are you here with us?
25:48
SPEAKER_02: Yes, I'm here.
25:49
SPEAKER_02: Finally.
25:49
SPEAKER_02: You can tell us a bit about who you are and where you work at.
25:52
And then you can tell us the link between circles and KMRC
25:56
because I think that's a
25:57
SPEAKER_02: new angle,
25:58
SPEAKER_02: which a lot of people are not aware of.
26:00
SPEAKER_00: Yes, thank you and good evening.
26:02
SPEAKER_00: And apologies.
26:03
SPEAKER_00: Shadra Ketane, I work for STEAMAR CYCLE.
26:07
One of the critical things that we do from the CYCLE
26:10
perspective is to meet the members' needs.
26:13
SPEAKER_00: And critically so,
26:14
one of the things we discovered from our members is that
26:18
tendency to take facilities.
26:20
SPEAKER_00: Most of the time when we investigate the purpose of those facilities,
26:24
SPEAKER_00: It's actually they are doing incremental house construction.
26:28
SPEAKER_00: And so then there was a need,
26:29
a serious need for us to be able to address that need from a
26:32
circle perspective.
26:33
SPEAKER_00: And so then getting the liquidity has been a challenge,
26:37
SPEAKER_00: especially most of the circles,
26:39
SPEAKER_00: because the funds that we have are short-term.
26:41
SPEAKER_00: And for us to be able to learn long-term,
26:43
SPEAKER_00: then we need something to be able to unlock that particular space.
26:47
And so the coming in now of KMRC did that for us in terms of
26:51
being able to get
26:52
SPEAKER_00: affordable funds.
26:54
SPEAKER_00: And of course,
26:54
being able again to lend them long-term to be able now still in
26:58
the mortgage space
26:59
SPEAKER_00: that has been lacking for quite a while.
27:02
SPEAKER_00: What does to a member,
27:04
it gives them the convenience to be able to repay the
27:07
facilities in affordable manner.
27:10
And we are happy to be one of the cycles that actually playing
27:13
big time in terms of
27:13
SPEAKER_00: this particular space.
27:15
SPEAKER_00: Currently,
27:15
we have been able to disburs more than 700 million to our
27:18
members to be able to
27:20
SPEAKER_00: purchase houses and also able to construct.
27:22
SPEAKER_00: And this we do.
27:23
SPEAKER_00: Even the diaspora client,
27:24
we have a big chunk of diaspora clients who also benefit from
27:27
this particular facility.
27:28
SPEAKER_00: And we have ordered an organized structure,
27:31
just a full department to be able to address the diaspora and
27:34
be able to get the
27:35
SPEAKER_00: needs and be able to fulfill what our members need.
27:37
So it has been a great engagement,
27:40
especially with the coming in of the KMRC.
27:43
SPEAKER_00: Thank you.
27:43
SPEAKER_00: Thank you, Shadok.
27:44
SPEAKER_02: back to you.
27:45
SPEAKER_02: What's the process now?
27:46
SPEAKER_02: I want a mortgage from KMRC or to be financed by KMRC,
27:50
SPEAKER_02: but I can't come directly to KMRC as I'm aware.
27:52
SPEAKER_02: So where should I go and what's the process?
27:55
SPEAKER_01: As I mentioned earlier,
27:56
initially we were providing this liquidity to financial
28:00
institutions who are our shareholders.
28:02
However,
28:03
just recently we opened it up to accommodate more financial institutions.
28:07
SPEAKER_01: So when you visit our website,
28:09
you'll be able to see the 20 financial institutions who have
28:14
already accessed KMRC
28:15
SPEAKER_01: funding and you can select one of them.
28:18
SPEAKER_01: And once you walk into any of those financial institutions,
28:21
SPEAKER_01: please ask for a KMRC-backed home loan.
28:25
SPEAKER_01: And two of those financial institutions are actually here with us today.
28:29
SPEAKER_01: And that is HFC and Stimasako.
28:32
And these are actually one of the leading financial
28:35
institutions offering this KMRC
28:37
SPEAKER_01: mortgage in this market.
28:38
Of course,
28:39
prior to that,
28:39
you would have chosen a residential property that meets our criteria.
28:44
SPEAKER_01: And that is a property that is $10.5 million and below.
28:48
SPEAKER_01: and worked to this financial institution for financing.
28:52
SPEAKER_01: If you've not found a property that is within that criteria,
28:55
we've also seen a situation where the PMLs have gone an extra
29:00
step to source for
29:01
SPEAKER_01: the supply or help you identify where the supply is.
29:05
SPEAKER_01: I think HFC is large scale on affordable housing supply,
29:09
so they can even support you by showing you the wide array of
29:13
properties that they have,
29:15
SPEAKER_01: which is within our criteria.
29:18
SPEAKER_01: So you just identify yourself as a Kenyan citizen,
29:21
SPEAKER_01: which is by provision of a national ID or a passport.
29:25
And the different requirements that the PMLs ask for just as
29:29
part of the credit analysis,
29:31
SPEAKER_01: which is income verification,
29:33
SPEAKER_01: whether it's face leads or bank statements or proof of cash flows,
29:38
SPEAKER_01: if you're in the informal sector,
29:40
SPEAKER_01: is the property details.
29:42
SPEAKER_01: And of course,
29:43
the property has to be valued in order to be able to give the
29:48
PML that assurance
29:49
SPEAKER_01: that in case you default,
29:50
SPEAKER_01: they'll be able to recover their funds.
29:53
SPEAKER_01: So the value of the property has to be aligned.
29:57
There's also the legal due diligence where the PML has to
30:01
confirm that this
30:03
SPEAKER_01: property is titled and it's a clean title.
30:06
SPEAKER_01: It's not encumbered.
30:08
SPEAKER_01: So there's the whole legal review that is normally done.
30:11
And the best part about acquiring a mortgage through this
30:14
financial institution,
30:15
you're actually covered in terms of risk when it comes to
30:20
either we've seen so many
30:22
situations in the market where properties are either brought
30:25
down because they're
30:26
sitting on public land or a building has just caved in because
30:30
of bad structural problems.
30:33
SPEAKER_01: issues or it was not approved by the local government.
30:37
So the best part about acquiring a mortgage through these
30:40
institutions is that they
30:41
SPEAKER_01: actually take the credit risk.
30:43
SPEAKER_01: They do the review for you.
30:45
SPEAKER_01: They do their due diligence.
30:47
SPEAKER_01: The valuation is done to ascertain the exposures to environmental,
30:52
SPEAKER_01: social risks,
30:52
SPEAKER_01: compliance risks.
30:54
SPEAKER_01: So you're ultimately covered.
30:56
SPEAKER_01: When it comes to a lot of different environmental and social exposures,
31:01
it's really important for Kenyans to know that this product is
31:05
available and a lot
31:06
SPEAKER_01: of the risk has been taken up by the financial institution.
31:10
SPEAKER_01: So once you provide all those documentation,
31:13
SPEAKER_01: of course,
31:13
the bank will proceed to approve your loan and as the loan
31:17
facilitating now the
31:18
SPEAKER_01: property purchase or whether you're constructing,
31:21
SPEAKER_01: they will disperse the amount in fases.
31:24
SPEAKER_01: until the construction is complete.
31:27
SPEAKER_01: Ideally,
31:28
that's the process and these institutions are available on our
31:31
website in case the
31:34
bank you're banking with or the circle you're in has not
31:37
approached us for liquidity.
31:39
And of course,
31:40
you're expanding the primary mortgage lenders as much as you can.
31:43
SPEAKER_02: I know like a couple of months ago, there were fewer.
31:45
SPEAKER_02: Now you've expanded a bit more.
31:47
SPEAKER_02: You're evaluating more institutions along the way.
31:50
SPEAKER_01: Absolutely.
31:50
SPEAKER_01: It's not open to any financial institution.
31:54
SPEAKER_01: So we are currently voting circle or any bank.
31:58
For circles,
31:59
it has to be a deposit taking circle or any bank has created
32:03
the KMRC product.
32:04
SPEAKER_02: We have
32:04
SPEAKER_02: Almost coming to the end of the conversation, it's a very engaging one.
32:07
SPEAKER_02: So I would want to ask you if you are listening,
32:10
SPEAKER_02: you know,
32:10
SPEAKER_02: if you have any question that is burning,
32:12
SPEAKER_02: just below a pinned tweet,
32:13
SPEAKER_02: you can type a few questions.
32:15
I've seen Sakata too,
32:17
who say that he is actually a beneficiary of a KMAC loan.
32:21
SPEAKER_02: I've seen your question.
32:22
SPEAKER_02: I will ask you a bit later in the conversation.
32:25
SPEAKER_02: I see a couple of questions are coming.
32:28
SPEAKER_02: We'll take note of them and we'll ask them very soon.
32:31
SPEAKER_02: I wanted to move to Stella and perhaps Shedra after that.
32:34
SPEAKER_02: You can tell us a bit about if someone is in the diaspora,
32:37
SPEAKER_02: how do they pay back the money that they owe?
32:39
Do you have arrangements for them to get money from abroad and
32:42
be able to make
32:43
SPEAKER_02: their payments to you?
32:44
SPEAKER_02: And a loan default happens and maybe a delayed payment happens.
32:48
SPEAKER_02: How do you deal with that for a person in diaspora?
32:50
SPEAKER_02: Stella.
32:51
SPEAKER_02: First.
32:52
SPEAKER_01: Can you allow me to go back to the two questions that you've asked me?
32:57
SPEAKER_01: Ask about the step-by-step process.
33:00
SPEAKER_01: And I may say the whole process takes approximately 90 days.
33:03
SPEAKER_01: However, we've seen that process taking longer.
33:05
Reason being for factors beyond the financial institutions,
33:09
like factors beyond HFs.
33:10
SPEAKER_01: Maybe to be able to elaborate that process is a
33:13
SPEAKER_01: a six-step process.
33:14
And the most critical is to have your income documents as well
33:18
as the property documents.
33:19
SPEAKER_01: But property for the bank,
33:20
SPEAKER_01: like HFC supporting you to be able to find that property,
33:23
SPEAKER_01: we will be able to provide.
33:25
Then for you,
33:25
for the income,
33:26
you could be either employed,
33:28
self-employed.
33:28
SPEAKER_01: You're in the diaspora, you're employed, you're self-employed, you're in
33:32
SPEAKER_01: business when contracts, we're able to support you.
33:34
So don't feel as though we are only looking for people who are
33:37
only employed.
33:38
Even if you're self-employed and I know quite a number of
33:41
Kenyans in the diaspora
33:42
are self-employed or they're on contracts and actually most of
33:45
them are on contracts,
33:46
SPEAKER_01: we are happy to be able to support you.
33:48
SPEAKER_01: So the first step is finding bad property.
33:50
SPEAKER_01: If you don't have bad property at HFC,
33:52
we're able to support you through what we have or through
33:55
developer boarded.
33:56
Then once you submit your document,
33:58
it's critical to be able to submit all the documents.
34:01
That ensures that we have a better turnaround time to be able
34:04
to give you the offer
34:05
SPEAKER_01: letter within three to five days.
34:07
SPEAKER_01: Then from that, we give you an indication to accept that offer letter.
34:11
SPEAKER_01: We just should be able to add people for 10 days.
34:13
And all this is to ensure that we're able to fast track the
34:16
process as fast as possible.
34:18
Once we accept the offer letter,
34:20
we progress to valuation of the property.
34:22
SPEAKER_01: And the reason why we need to ensure that there are no encumbrances,
34:25
SPEAKER_01: and I'm happy that FLIR has been able to highlight this pretty well.
34:29
SPEAKER_01: The longest time is at the legal stage, which you also call convincing.
34:33
SPEAKER_01: And the reason why it takes a longer time, it's because we're involved...
34:37
SPEAKER_01: properties, that's the lawyers.
34:38
And the reason why the lawyer is coming is to be able to charge
34:41
the property.
34:42
Subtracting the properties whereby the property will be owned
34:45
jointly with the bank
34:46
SPEAKER_01: and it will be in your name,
34:48
SPEAKER_01: but written charged to the bank.
34:50
SPEAKER_01: The bank is going to hold that title.
34:52
for as long as you have a mortgage in this institution,
34:55
let's say at HFC.
34:57
SPEAKER_01: Then from charging,
34:57
SPEAKER_01: you go to there,
34:58
SPEAKER_01: register the printer to name,
35:00
SPEAKER_01: and all that takes approximately 40 to 60 days.
35:02
SPEAKER_01: That's what it takes the longest.
35:04
And we are hoping with all these tests that are coming up and
35:07
that the changes
35:07
SPEAKER_01: happening at the LANDS office,
35:08
SPEAKER_01: this process can be able to improve
35:10
SPEAKER_01: In other countries, this process is taking as short time as possible.
35:14
SPEAKER_01: But we hope one day, one time, we can be able to do business.
35:16
SPEAKER_01: The whole process should be able to take approximately 30 days.
35:19
SPEAKER_01: And then once we're able to despise the loan and moving to the property.
35:23
SPEAKER_01: So I go to a question, Mokaya Webber, ask that to diasporas.
35:26
SPEAKER_01: How do they pay their money?
35:27
SPEAKER_01: One,
35:28
we support them by opening their accounts back here in Kenya
35:31
and they can be able
35:32
to send money through our correspondence bank as well as also
35:35
through other platforms.
35:36
We have quite a number of payment platforms that they can be
35:39
able to send money and
35:40
SPEAKER_01: some of the platforms that are very,
35:42
very efficient and all what you need to do is to be able to
35:45
send the money in the country.
35:47
SPEAKER_01: And for instance, in case of loan default, as a bank, what do we do?
35:51
SPEAKER_01: One thing that we understand
35:52
SPEAKER_01: encourage our customers to do is keep your,
35:55
SPEAKER_01: uh,
35:55
SPEAKER_01: relationship manager closed in case of any final cost,
35:59
SPEAKER_01: they're able to understand and even be able to guide you on what to do.
36:03
So in case of default,
36:05
uh,
36:05
you'll notice that a foreclosure is our last result.
36:08
SPEAKER_01: We support our customers by either restructuring the facilities.
36:12
And please encourage our diaspora customer to be able to
36:15
maintain where possible,
36:16
SPEAKER_01: maintain two times of your rent repayment in your account.
36:20
And some of this money you can be able to deposit in some of
36:23
the accounts we have
36:24
SPEAKER_01: that we are currently paying competitive interest.
36:26
SPEAKER_01: So you know that you are preparing to pay for a loan.
36:29
However,
36:29
you put some money aside to be able to support you in case of
36:33
any time you experience.
36:35
So it's important for once in case you feel that you have
36:38
financial constraints and
36:39
SPEAKER_01: you feel that you may not be able to pay your relationship manager.
36:42
SPEAKER_01: One thing our relationship managers,
36:44
they are well equipped to be able to ensure that we're able to
36:46
demystify the full
36:48
SPEAKER_01: process and even to be able to handhold our customers.
36:51
SPEAKER_01: Post disbursement,
36:51
you are still able to be able to work with our customers and to
36:54
be able to guide
36:55
SPEAKER_01: them with their growth as 10%
36:57
SPEAKER_01: they have any constraints.
36:58
So do not shy away to engage your bank or to engage like HFC in
37:02
case you fall back
37:04
or in case you're experiencing financial constraints because
37:06
our core business is
37:07
SPEAKER_01: not to foreclose.
37:08
SPEAKER_01: It's not to auction a property.
37:10
Our core business is to be able to support all the properties
37:13
that you have dreaming about.
37:15
And it's all about empowering you to be able to own a property
37:18
and you're not a
37:19
SPEAKER_01: property appreciating value.
37:20
SPEAKER_01: So today you buy a property in
37:23
SPEAKER_01: 10,
37:23
SPEAKER_01: five years,
37:23
SPEAKER_01: 10 years time with an acquisition level of in between three to 4%,
37:27
SPEAKER_01: you find that now people have been able to appreciate.
37:30
SPEAKER_01: And then maybe for those 20 years,
37:32
SPEAKER_01: if you take a loan with us,
37:33
SPEAKER_01: like for 20 years,
37:34
SPEAKER_01: someone can easily say 20 years is a very long time.
37:37
SPEAKER_01: Also encourage our customers,
37:39
SPEAKER_01: if you're getting lifetime amounts of money,
37:41
SPEAKER_01: you can be able to clear your mortgage early.
37:43
So we do not penalize our customers for putting in lifetime
37:45
amounts of money or for
37:46
SPEAKER_01: paying in their mortgage early.
37:48
SPEAKER_01: So I know I've covered that widely,
37:51
but I just wanted our customers to understand the process and
37:54
in case of default
37:55
SPEAKER_01: and even the measures that we have to support them in property ownership.
37:59
I think one thing that a lot of people don't know that before
38:03
you default or if
38:04
SPEAKER_02: it's likely to default,
38:05
SPEAKER_02: come talk to your relationship manager as quickly as possible.
38:08
SPEAKER_02: So there are solutions.
38:10
SPEAKER_02: Do you agree with that?
38:12
SPEAKER_01: Absolutely.
38:13
SPEAKER_01: That's the truth, Mokaya.
38:14
SPEAKER_01: That's why I say,
38:15
SPEAKER_01: always keep them so as such that in case we get any questions,
38:18
SPEAKER_01: they can be able to guide you,
38:19
SPEAKER_01: whether you can restructure the facility,
38:22
SPEAKER_01: we can reschedule,
38:23
and we also have other packages that can be able to support our
38:26
customers before we
38:27
SPEAKER_01: get foreclosure.
38:28
SPEAKER_01: The reason why sometimes Mokaya makes foreclosure is because
38:31
Maybe the customer is not engaging the bank or you haven't
38:35
advised the bank.
38:35
SPEAKER_01: Maybe you could be going through financial issues.
38:38
SPEAKER_01: And even sometimes we also guide our customers.
38:39
SPEAKER_01: They also assume that maybe you are going through a financial question.
38:42
We even recommend maybe selling through private treaty rather
38:45
than going through
38:46
SPEAKER_01: the foreclosure.
38:47
Private treaty is whereby we engage you to sell that property
38:50
at the market value.
38:51
SPEAKER_01: And for instance, if the property was valued at maybe $10,000,000,
38:55
SPEAKER_01: sell at that $10 million and if your loan was $5 million,
38:57
you're able to clear that $5 million and you have some extra
39:00
money to put into your pocket.
39:02
So we have quite a number of packages that we support our
39:05
customers and foreclosure
39:07
SPEAKER_01: is the last resort.
39:08
SPEAKER_01: And it's not our core business and we are not happy to go there.
39:12
people have a lot of scars from the nineties of a lot of people
39:15
being thrown out of
39:16
SPEAKER_02: houses and all.
39:17
SPEAKER_02: So it's very important that you clarify that.
39:19
SPEAKER_02: Shendra, back to you.
39:21
SPEAKER_02: Circos, how are they supporting people in diaspora?
39:23
How has it been like in terms of the people in diaspora and
39:25
their uptake of
39:26
SPEAKER_02: affordable housing solutions?
39:28
We have a wide array of solutions in terms of how we support
39:33
the diaspora people.
39:34
SPEAKER_00: And as I said,
39:35
one of our branches that is really growing is actually what we
39:38
refer to as a diaspora.
39:39
SPEAKER_00: That's why we have formed up a team, formed up a department.
39:43
SPEAKER_00: The main role is just to address anything that comes from the diaspora.
39:47
SPEAKER_00: And so we have a pool of trained staffs.
39:51
who actually are able to take our members through the entire
39:55
mortgage process.
39:56
One of the key things you discovered is even before the members
39:59
come in to do the application,
40:01
it's critical that they actually expose through the process so
40:04
that now all the
40:05
SPEAKER_00: questions are raised,
40:07
SPEAKER_00: they are addressed and members are directed in terms of
40:10
SPEAKER_00: How best are they able to begin the mortgage process?
40:13
And when that one has already been done,
40:15
then the process becomes very,
40:17
very seamless.
40:18
SPEAKER_00: In terms of remittances, we have a number of them.
40:23
And depending on where our members are,
40:25
because we have members in the US,
40:27
in the UK,
40:28
in
40:28
SPEAKER_00: In EU countries, we have NALA.
40:31
SPEAKER_00: We use that word in those particular areas.
40:33
SPEAKER_00: We have PesaDirect.
40:35
SPEAKER_00: We have SendWeb.
40:36
SPEAKER_00: And we also have M-Pesa.
40:37
One of the things that happens at the circle is you have to
40:40
serve most of the time.
40:41
So we'll find most of our members are able to serve through
40:44
those different platforms.
40:46
SPEAKER_00: They're able to accumulate their savings.
40:48
The same way they do that,
40:50
then they're also able to channel their lottery payments.
40:54
SPEAKER_00: in terms of paying those specific loans.
40:57
And one of the things we also agree with them is they need to
41:00
understand their contracts.
41:01
SPEAKER_00: They need to have all the documentation that are required.
41:04
SPEAKER_00: If they offer letters,
41:05
SPEAKER_00: they need to know how much are they paying,
41:08
SPEAKER_00: when are they paying,
41:09
and which is the most convenient way of being able to remit
41:13
those funds so that we
41:14
SPEAKER_00: are able to avoid issues of delay
41:17
SPEAKER_00: and also issues of non-repayment.
41:20
SPEAKER_00: And in the worst case, not aware we have to experience the default.
41:23
SPEAKER_00: We have a very robust system,
41:26
SPEAKER_00: a system of SACO,
41:27
SPEAKER_00: and we're able to identify any cases of non-repayment early enough.
41:32
SPEAKER_00: Once we identify those cases early enough,
41:34
SPEAKER_00: we're able to follow up with our members,
41:35
SPEAKER_00: be able to remind them,
41:36
SPEAKER_00: be able to find out what could be the issues that are coming up.
41:39
SPEAKER_00: And then we're also able now to prescribe a number of solutions to them.
41:43
SPEAKER_00: Do they need a restructure?
41:44
SPEAKER_00: Do they need a rescheduling?
41:46
SPEAKER_00: What could be the issue?
41:47
So we have a number of things that we're able to address just
41:50
to ensure that our
41:51
SPEAKER_00: members are comfortable wherever they are.
41:55
One of the things that we pride ourselves in is that all the
41:58
desperate members that
41:59
SPEAKER_00: we actually lend to in terms of affordable mortgages,
42:02
SPEAKER_00: most of them are repaying.
42:04
And it's a very good market for us because then it helps us not
42:07
to be able to
42:07
refinance more members and be able to bring in the funds that
42:11
are required.
42:12
SPEAKER_00: So we opened up the platform and also
42:15
SPEAKER_00: engage our members and request those who are our members,
42:18
SPEAKER_00: those who love to join and be members of Steema Circle,
42:21
SPEAKER_00: that we have all those options that they're able to make use of,
42:23
to be able to repay their loans and to be able to take care of
42:27
any issues of
42:28
SPEAKER_00: default in the future.
42:29
SPEAKER_02: A few more questions come in.
42:31
SPEAKER_02: And perhaps before I switch to that,
42:33
SPEAKER_02: maybe any of you can handle these tax implications,
42:36
SPEAKER_02: legal requirements,
42:37
SPEAKER_02: perhaps,
42:37
SPEAKER_02: and financial risks that may be specific to diaspora people.
42:40
SPEAKER_02: They should watch out and detect affordable housing pollutions.
42:44
SPEAKER_02: Are there any things that you should look out for?
42:46
SPEAKER_02: Top of mind, slow, teller, or share of your odds?
42:49
SPEAKER_02: An open floor question.
42:51
SPEAKER_01: I think I'm at the PMS to handle this,
42:53
SPEAKER_01: considering that they deal directly with their...
42:56
SPEAKER_02: Stella,
42:57
SPEAKER_02: any top of minds,
42:58
SPEAKER_02: quick thing that diaspora people should specifically look at?
43:01
SPEAKER_02: I know you emphasize the issue of documentation and using professionals.
43:05
Anything that you may have missed there before I go to the
43:08
questions from the audience?
43:09
SPEAKER_02: All right.
43:10
The most important thing that our diaspora customers need to
43:14
know is that,
43:15
SPEAKER_01: and even to be aware of,
43:16
SPEAKER_01: if you're getting into property ownership,
43:18
they need to be aware of the incidental costs or the other
43:20
costs that come in with
43:21
property ownership and need to be able to understand the
43:25
property ownership.
43:25
SPEAKER_01: And if they don't understand that, they're mystified.
43:28
So some of these incidental costs or other closing costs,
43:31
they usually range in between.
43:34
SPEAKER_01: And this is like a stamp duty, which is at 4%.
43:37
SPEAKER_01: We have the legal fees, which is charged according to the lawyer scale.
43:41
SPEAKER_01: We also have the federal graduate fees,
43:43
which are charged according to the Institution of Surveyors of
43:46
Kenya scale.
43:47
SPEAKER_01: So for this, they should have been 20 to 8%.
43:49
And it's important anytime you're getting into a property
43:52
ownership journey to have
43:53
SPEAKER_01: this in the back of my life.
43:55
SPEAKER_01: And what's usually encourage our customers is like at HFC,
43:58
SPEAKER_01: we finance our customers in between 80 to 90%.
44:02
And the reason why we do this is because we note that when
44:05
we're borrowing a lower
44:07
SPEAKER_01: amount of money,
44:08
SPEAKER_01: you're able to pay less amount of money.
44:10
SPEAKER_01: And also it eases your burden.
44:12
SPEAKER_01: And also if you're able to save towards home ownership,
44:15
SPEAKER_01: it supports you to be able to get into that property without much change.
44:19
Because we've seen the higher financing,
44:21
the higher the yard,
44:22
the higher the repayment.
44:24
SPEAKER_01: So we encourage our customers,
44:26
SPEAKER_01: if possible,
44:27
SPEAKER_01: try and put in more equity contribution towards our property.
44:31
SPEAKER_01: So it's good then to be able to pay incidental costs.
44:34
SPEAKER_01: Faber, do you have anything to add there?
44:36
SPEAKER_00: Yes, that's very true.
44:38
SPEAKER_00: One of the things also is in terms of maybe if you're doing a house,
44:43
SPEAKER_00: maybe it's the period around completion.
44:46
And I think one of the supports we give to our members is to
44:50
work with them through
44:51
SPEAKER_00: that journey because at times it becomes a challenge.
44:54
SPEAKER_00: The conversation begins and does not end on time.
44:57
And because of the issues of inflation,
44:59
increase of prices of those materials,
45:02
SPEAKER_00: Then that becomes a big thing.
45:04
SPEAKER_00: Now at the CERCO,
45:05
we have several other options that help our members in terms of
45:09
being able to do that.
45:10
Because once we have agreed in terms of this is the direction
45:14
that the project
45:14
SPEAKER_00: should take,
45:15
SPEAKER_00: we fast track that with assistance of our
45:18
are capable service providers just to be able to ensure that
45:21
once you begin your house,
45:23
SPEAKER_00: you're able to finish on time.
45:24
In case of any funds that probably will be required to be able
45:27
to complete that,
45:28
we're able to provide that run on time just to be able to take
45:31
care of those
45:33
SPEAKER_00: increases in prices and the issues of inflection.
45:36
SPEAKER_02: Quick question here.
45:38
SPEAKER_02: One is elaborate more mortgages for construction of home.
45:41
SPEAKER_02: And the second question is from Sakata2 who is asking,
45:45
he took a pharmacy loan from a bank for the construction of his
45:49
village house,
45:50
SPEAKER_02: but he had to leave security.
45:52
So he's wondering,
45:53
should people really be requiring security in this regard?
45:56
SPEAKER_02: Because he says the village house may not have market value.
46:00
SPEAKER_02: So two quick questions open for any of you to take up and handle them.
46:05
Maybe I can be able to respond to the question on the security
46:07
for the village house.
46:08
SPEAKER_01: And this is how I can be able to respond to it.
46:11
SPEAKER_01: Anytime you are taking a loan,
46:12
there are two critical things that are required by a bank or by
46:16
a financial institution.
46:18
SPEAKER_01: One of the things that you require is your income and property.
46:22
SPEAKER_01: Your income is to be able to go home on the ability to pay.
46:25
SPEAKER_01: Well, the property comes in the security.
46:28
SPEAKER_01: So the reason why maybe...
46:30
The particular financial institution requested for a different
46:32
title for the village house.
46:34
SPEAKER_01: It's because as a financial institution,
46:36
we finance properties within the county headquarters or what
46:40
was normally known as
46:41
SPEAKER_01: before devolution,
46:42
SPEAKER_01: what was called the municipalities.
46:44
So the properties need to be within the county headquarters or
46:48
the municipalities.
46:49
SPEAKER_01: And we may not finance a property in the country if it's not within
46:54
the county headquarters or if it's like an ancestral property
46:58
that we may not be
46:59
SPEAKER_01: able to take as a security because of even in case of default,
47:03
SPEAKER_01: it becomes difficult to be able to realize an ancestral property.
47:07
It's not easy even for a financial institution to realize an
47:10
ancestral property
47:11
because these are properties that are bled from one generation
47:13
to another.
47:14
And even you find that even for these properties,
47:16
sometimes there are no rents.
47:17
SPEAKER_01: So the properties need to be within the county headquarters.
47:22
SPEAKER_00: Shadak, did you have something to add to that?
47:24
SPEAKER_00: Yeah, the first question was about the construction mortgage facility.
47:28
And one of the things we always discovered from our business of
47:31
lending is that
47:33
most of the members will want to get a facility for
47:36
constructions as opposed to purchase,
47:38
simply because they're able to turn and make to their tastes
47:40
and preferences.
47:41
SPEAKER_00: That's very critical.
47:42
SPEAKER_00: Now, what happens if that's what you want?
47:45
SPEAKER_00: Number one,
47:46
you have to construct a house on land to ensure you have a
47:49
piece of land that has
47:51
SPEAKER_00: ownership documents.
47:52
SPEAKER_00: That is very critical.
47:53
SPEAKER_00: If you come at the circle and you have a land that has either title,
47:57
SPEAKER_00: deed or certificate of lease,
47:59
SPEAKER_00: then the circle is able to give you 100% in terms of constructions.
48:03
SPEAKER_00: You have to know the cost of that house.
48:06
SPEAKER_00: If it's a bungalow, we need to have a QS, give us the bill of quantities.
48:11
SPEAKER_00: And if it is a mansionate,
48:13
SPEAKER_00: then ensure you have structural drawings from an engineer,
48:15
SPEAKER_00: qualified engineer.
48:16
And of course,
48:17
the process begins with an architect giving you also the plans.
48:21
SPEAKER_00: And all those things have to be approved.
48:24
SPEAKER_00: So we have to get approved structural drawings by the engineer.
48:27
The architectural plans also have to be approved and the bin of quantities.
48:31
SPEAKER_00: and we have the ownership documents for land,
48:33
you can count with the circle plus the other documents in terms
48:37
of income that
48:38
SPEAKER_00: we're able to evaluate.
48:39
SPEAKER_00: If the project is 10 million,
48:41
SPEAKER_00: then we're able to check whether we're able to repair the 10 million,
48:44
SPEAKER_00: and then we begin with it.
48:45
Now at the circle,
48:46
we'll give you at 9%,
48:48
as I said,
48:50
the maximum is 25 years.
48:52
SPEAKER_00: Of course, now depending again on your income.
48:55
So what we will do is once everything is done,
48:57
the charging process is complete.
48:59
SPEAKER_00: We'll start disbursements by tranches and we go different levels.
49:03
SPEAKER_00: We'll start with the foundation.
49:05
SPEAKER_00: We check is okay.
49:06
We'll go through the warning stage,
49:08
go to the room up to the point where the house is done.
49:11
SPEAKER_00: The SAC was able to give you in small tranches.
49:13
You're going to inspect to ensure there's quality in terms of
49:16
what is happening.
49:17
And once the house is complete,
49:19
then you'll have now to live in that house.
49:21
SPEAKER_00: Pay the facility until completion.
49:24
SPEAKER_00: Then we shall be able to discharge the circle.
49:26
SPEAKER_00: And now the house becomes flat.
49:28
So that is a brief process in terms of how we go about
49:32
construction loans.
49:33
SPEAKER_00: Thank you.
49:34
SPEAKER_01: Probably just to add to what my two colleagues have said.
49:38
SPEAKER_01: When you look at a mortgage,
49:39
SPEAKER_01: especially in terms of the size,
49:41
SPEAKER_01: the ticket size,
49:42
SPEAKER_01: it's really quite huge.
49:43
So these financial institutions are naturally taking risk in
49:48
order to give you that
49:50
SPEAKER_01: 9% interest rate.
49:52
So it's really important that they secure themselves in order
49:55
to protect their
49:57
SPEAKER_01: interest in case the borrower is not able to meet the obligation.
50:01
SPEAKER_01: So security is really important because you as the borrower,
50:05
You're likely to pay your loan on time because you will risk
50:09
losing that property
50:11
SPEAKER_01: if you default.
50:12
SPEAKER_01: Can you imagine a situation where mortgages were unsecured properties?
50:17
SPEAKER_01: If the defaults were so high like the way they are right now at 16%,
50:19
it would really affect the financial stability of these
50:24
financial institutions.
50:26
SPEAKER_01: So they are actually taking risk in order to be able to give you
50:31
SPEAKER_01: That's 9%.
50:32
And that's why security is very important whenever they're
50:36
financing you for a mortgage.
50:38
I'll give you a chance to give closing thoughts,
50:41
but one quick question here.
50:43
SPEAKER_02: I think for the same guy who took up a loan from KMRC,
50:46
SPEAKER_02: he's wondering,
50:47
are South Coast conflicted in terms of offering their own
50:50
solutions or coming to KMRC?
50:52
SPEAKER_02: And perhaps, Flo, you can answer this.
50:54
Why are financial institutions not pushing a bit more the
50:57
single-digit mortgage rates?
50:59
SPEAKER_02: so that people can be more aware.
51:00
SPEAKER_02: For me also,
51:02
SPEAKER_02: personally,
51:03
it's only in the past year or so as we engage KMRC that I've
51:05
been able to be made
51:06
SPEAKER_02: more aware of these single digits.
51:08
SPEAKER_02: So perhaps you can tell us a bit about that.
51:10
Maybe you can start with Flo and then Shadrach and then tell us
51:12
if you have
51:13
SPEAKER_02: anything to add on that.
51:14
I'm really excited to hear that someone from the audience has
51:17
benefited from the KMRC loan.
51:19
It really gives that fulfillment that as we are seated back in
51:22
our office,
51:23
SPEAKER_01: this financing is creating an impact for Kenyan somewhere.
51:26
There's really been a lot of awareness being created and we
51:29
continue to create
51:30
SPEAKER_01: awareness about this KMRC product.
51:33
SPEAKER_01: And probably just to elicit in a conversation,
51:36
SPEAKER_01: when was the last time you thought about buying a home?
51:39
SPEAKER_02: I have thought about it recently myself.
51:42
SPEAKER_01: Have you ever realized if you decide,
51:44
SPEAKER_01: for example,
51:45
SPEAKER_01: to buy a car today,
51:47
you'll start seeing the kind of cars you're interested in
51:50
buying on the road as
51:52
SPEAKER_01: opposed to when you're not interested.
51:54
SPEAKER_01: What I'm trying to communicate is if you're really looking to own a home,
51:58
You will see the visibility of this KMRC product because we are
52:02
constantly on our
52:03
SPEAKER_01: social media platforms.
52:05
SPEAKER_01: You are constantly in the newspaper.
52:07
It's something that we do on a daily basis,
52:10
creating awareness about this KMRC product.
52:12
And we've partnered even with financial institutions to be able
52:16
to spread this
52:17
SPEAKER_01: awareness to Kenyans.
52:19
SPEAKER_01: Yes, they are still offering the market rate product.
52:22
SPEAKER_01: However, the affordable housing product is also being offered.
52:26
And we've seen a lot of prioritization because of the
52:30
advantages that comes along
52:32
SPEAKER_01: with the KMRC product,
52:34
SPEAKER_01: of course,
52:34
SPEAKER_01: being fixed and single digit,
52:36
SPEAKER_01: which is something new in this market.
52:39
SPEAKER_01: We continue to create this visibility and we keep enhancing it.
52:44
It's part of our strategy for the next five years to ensure
52:47
that as many Kenyans as
52:49
possible are able to know about availability of this financing
52:54
that can accord them
52:55
SPEAKER_01: at home.
52:56
I think I'll leave it to my two financiers to also talk about
53:00
their visibility and
53:01
how they are creating awareness in this market to enable
53:04
Kenyans to know more about
53:06
SPEAKER_01: this KMRC product.
53:09
Stella and Chad,
53:10
anything to add there before I pose my final question to you guys?
53:14
Maybe what I can be able to say is,
53:16
for HFC,
53:17
what you're using is the opportunity that we have.
53:19
SPEAKER_01: We are having these discussions here.
53:21
SPEAKER_01: These discussions are available.
53:23
SPEAKER_01: We are visible.
53:24
SPEAKER_01: We are supporting our customers.
53:26
As Alan mentioned,
53:28
we were the first financial institution to access the funding
53:31
from KMRC.
53:32
SPEAKER_01: We've seen quite a number of Kenyans accessing loans.
53:34
SPEAKER_01: And for us,
53:35
we are happy to be able to support as many people as possible
53:38
because our purpose
53:39
is enriching lives and enriching lives through empowering you
53:43
to be able to own
53:43
SPEAKER_01: that home.
53:44
We are happy to be able to engage as many Kenyans as possible
53:48
locally in the
53:49
SPEAKER_01: diaspora to be able to own property that you have been trimming off.
53:52
SPEAKER_01: And that is where we are here.
53:53
SPEAKER_01: And that's what Thara has said.
53:54
SPEAKER_01: This gives us fulfillment when you see a customer owning a property.
53:59
One of the principles of the circle is member economic
54:03
participation and also
54:04
SPEAKER_00: member education and training.
54:06
SPEAKER_00: That's why actually in this season, we are doing extensive training.
54:09
SPEAKER_00: And of course,
54:10
one of the things we are doing is economic empowerment by
54:13
ensuring that our members
54:14
SPEAKER_00: are able to know what we offer.
54:16
SPEAKER_00: And one of those best products that we are sending,
54:19
SPEAKER_00: if you look at our billboards,
54:20
SPEAKER_00: if you look at our digital platforms,
54:22
SPEAKER_00: if you look at our marketing events,
54:24
SPEAKER_00: it's single digit industry to be able to own a home.
54:27
SPEAKER_00: for a slowness, 25 years.
54:29
SPEAKER_00: That is very critical.
54:31
I know we may not have done as much,
54:32
but the truth of the matter is that's what we do now.
54:35
SPEAKER_00: As a circle, it's a wheelchair of the members, not so much about returns.
54:39
SPEAKER_00: And that's why when we see our members getting lower rates,
54:42
SPEAKER_00: affordable rates for a longer period of time,
54:45
SPEAKER_00: it's actually our joy because circles,
54:47
we give back to our members because those are the people that
54:50
matter to us.
54:51
SPEAKER_00: So we keep pushing,
54:52
SPEAKER_00: we keep talking about it,
54:54
SPEAKER_00: we keep shouting about it,
54:55
SPEAKER_00: that we have many other products of course at the circle,
54:58
SPEAKER_00: but this particular product is actually transforming lives.
55:02
And everyone is welcome to be a member and participate and be
55:05
able to enjoy what
55:06
SPEAKER_00: the other members are getting.
55:08
SPEAKER_00: Thank you.
55:09
SPEAKER_02: As respect to Flo, two questions here.
55:11
SPEAKER_02: Someone has asked two circles when they partner with you and they say no.
55:14
I think we've given them a list of the 20 institutions that you
55:17
partner with.
55:18
SPEAKER_02: You are in the process of expanding to more circles.
55:20
SPEAKER_02: Could you clarify that to people that they can be a bit more relaxed?
55:23
SPEAKER_02: I think some circles are saying they don't provide.
55:26
And the second one is they're asking whether you should have
55:29
uniform policies for
55:31
SPEAKER_02: participating institutions.
55:32
It says one of the banks that you work with has been asking for
55:36
income eligibility
55:37
SPEAKER_02: criteria to make sure that you qualify.
55:39
SPEAKER_02: So,
55:39
but do you have uniform policies across the banks or is it
55:43
different in the banks
55:44
SPEAKER_02: and financial institutions?
55:45
SPEAKER_01: Thank you.
55:46
SPEAKER_01: Thank you, Mokaya.
55:47
One of our key objectives in this market is really to ensure
55:50
standardization of
55:51
SPEAKER_01: mortgage lending practices among all our member institutions.
55:56
SPEAKER_01: And yes, we do adopt uniform policies across all our member institutions.
56:02
So the guideline that we've given to our primary institution at
56:05
the moment is single digits.
56:08
SPEAKER_01: It's really an agreement with financial institutions.
56:11
SPEAKER_01: We really don't prescribe or impose that single digits.
56:15
It's really an agreement between the financial institutions and
56:18
KMRC that this
56:19
SPEAKER_01: benefit needs to be passed on to Kenyans.
56:22
SPEAKER_01: And that's why they've been issuing single digit mortgages.
56:26
SPEAKER_01: Same thing on income requirement and same thing on the loan limit.
56:30
SPEAKER_01: So we remain agile and we keep evolving from time to time.
56:34
SPEAKER_01: So sometime back when we established the institution,
56:38
SPEAKER_01: the loans were initially capped at $4 million.
56:41
This was initially aligned to the affordable housing program
56:45
that was in existence at the time.
56:48
However,
56:48
when it comes to practically implementing the product,
56:52
we realized that
56:54
SPEAKER_01: Some of these properties do not exist.
56:56
And we got a lot of feedback from the market and also from our
56:59
financial institutions.
57:01
SPEAKER_01: And we were able to review that loan requirement from $4 million.
57:05
SPEAKER_01: We went to $6 million.
57:07
SPEAKER_01: And now we're actually at $10.5 million.
57:09
SPEAKER_01: Same thing to the income limit.
57:11
SPEAKER_01: It was initially capped at $150,000.
57:14
We took it up to $200,000 due to various factors like inflation
57:19
having eroded,
57:20
SPEAKER_01: the purchasing power of many Kenyans.
57:23
SPEAKER_01: And now we've removed that income limit.
57:26
SPEAKER_01: So we give that advisory to all our primary institutions,
57:30
SPEAKER_01: which is standard across all financial institutions.
57:33
SPEAKER_01: So the KMRC,
57:35
SPEAKER_01: where we stand as KMRC,
57:36
those requirements apply uniformly across all the financial
57:41
institutions that are
57:42
SPEAKER_01: accessing KMRC funding.
57:44
SPEAKER_02: I want to give each of you a chance to give your closing thoughts.
57:48
SPEAKER_02: I'll start with Shadrach and then Flo.
57:50
You can also tell people where they can find you and such kind
57:54
of relevant
57:54
SPEAKER_02: information as they are to your very financial institution.
57:57
SPEAKER_02: Shadrach.
57:58
SPEAKER_02: Thank you.
57:58
I think it has been now a wonderful engagement just to be able
58:04
to share some of the
58:05
SPEAKER_00: things that we do,
58:06
SPEAKER_00: especially with Timothako.
58:09
SPEAKER_00: And our intention is to transform lives and transform communities.
58:15
And that is why we have products that reflect the members'
58:20
needs in terms of
58:21
SPEAKER_00: mortgages and people in the diaspora.
58:23
Right now,
58:24
the mortgage space has been demystified,
58:27
coming in the space,
58:29
the circles.
58:30
And it's a lot more easier and it's more friendly in terms of
58:35
having to borrow from the circle.
58:37
SPEAKER_00: And so just to encourage people to come, join, look for us in our pages.
58:44
SPEAKER_00: We are there, stimasircle.com.
58:46
come to our offices at Parkland to inquire and will be helped
58:50
in terms of getting
58:52
personalized information in terms of how you are able to own a
58:55
house either through
58:57
SPEAKER_00: patches or through constructions at very affordable rates.
59:01
SPEAKER_00: And right now,
59:02
information is out there and we are more than willing to be
59:05
able to assist any
59:06
SPEAKER_00: person who would want to come,
59:08
SPEAKER_00: join the scope and let their lives also be transformed.
59:10
SPEAKER_00: Thank you, Chandra.
59:11
SPEAKER_00: Stella, over to you.
59:13
SPEAKER_01: Thanks to Mokaya for having me this evening.
59:15
SPEAKER_01: One thing I can say is one or two things is that at HFC,
59:20
SPEAKER_01: as I said earlier,
59:21
purpose is to enrich lives and to enrich gifts through
59:23
financial empowerment.
59:25
SPEAKER_01: So we are here to be able to empower you,
59:27
SPEAKER_01: to be able to own that property that you've been living well.
59:29
SPEAKER_01: Do not shy off to walk into one of our branches or even to call.
59:33
SPEAKER_01: For our diaspora customers, we have our diaspora banking.
59:36
team as well as the mortgage business team to be able to
59:39
support you to walk that journey.
59:40
Don't think that owning a property or the mortgage journey or
59:43
the property
59:44
SPEAKER_01: ownership journey is difficult.
59:45
SPEAKER_01: We will be able to demystify and make it easy to handhold you.
59:48
SPEAKER_01: We have about 24 hours, seven days contact center, be able
59:52
SPEAKER_01: to support you to own that property.
59:55
SPEAKER_01: And then the thing is that we offer all our solutions under one roof.
59:59
SPEAKER_01: So we'll be able to come in,
1:00:00
SPEAKER_01: we'll be able to get a property,
1:00:01
SPEAKER_01: we'll be able to get finance,
1:00:02
SPEAKER_01: as well as we'll be able to get other full banking services.
1:00:05
So currently we're offering all the full banking services to do
1:00:08
our way to work into the bank.
1:00:10
And I know one of the things maybe I can be able to respond and
1:00:13
make it short is on
1:00:14
SPEAKER_01: people keep on asking where is the supply or where are the properties.
1:00:18
The properties are there in the market because we have seen
1:00:21
quite a number of
1:00:22
SPEAKER_01: developers who have come into the market.
1:00:24
And maybe while something that we don't be able to aware of is
1:00:27
that the government
1:00:27
is offering concessions to developers who are putting up
1:00:31
affordable houses.
1:00:32
If you put up more than 100 houses,
1:00:34
one is able to get benefits of like corporate tax.
1:00:36
And quite a number of other lobbies where when somebody puts up
1:00:40
affordable houses
1:00:41
SPEAKER_01: above 100 units,
1:00:42
SPEAKER_01: Then we have the fixed rates for a maximum time of 20 years.
1:00:47
So don't shy away,
1:00:48
walk in,
1:00:48
and we'll be able to support you to own that property.
1:00:51
SPEAKER_01: Thank you very much.
1:00:52
SPEAKER_02: Flo,
1:00:53
you can give us your closing thoughts and where we can find all
1:00:55
these wonderful
1:00:56
SPEAKER_02: solutions that you offer.
1:00:57
SPEAKER_01: So thank you so much, Mokaya.
1:00:59
SPEAKER_01: That was a very good engagement.
1:01:02
The main purpose for us really is to treat that awareness in
1:01:06
the market that this
1:01:07
product is available and to encourage as many Kenyans as
1:01:09
possible to take advantage
1:01:11
SPEAKER_01: of pollution to own a home.
1:01:13
SPEAKER_01: KMRC is paving the way by providing this long-term financing.
1:01:18
And we've seen financial institutions being very innovative in
1:01:21
terms of even how
1:01:22
SPEAKER_01: they provide some of these solutions.
1:01:25
SPEAKER_01: And that's why we are really opening it up to encourage as many financial
1:01:29
SPEAKER_01: institutions as possible to be able to access KMRC financing,
1:01:33
because we'd like to give you a wide array of financial
1:01:36
institutions to choose from.
1:01:38
SPEAKER_01: So if you don't feel comfortable where you are,
1:01:40
you can easily walk to another financial institution and be
1:01:43
able to get that product,
1:01:45
which you feel is convenient and being offered to you at the
1:01:48
most convenient and
1:01:49
SPEAKER_01: efficient way.
1:01:51
So to fully leverage on some of these opportunities and we
1:01:54
encourage the public,
1:01:56
SPEAKER_01: especially the diaspora clients,
1:01:58
SPEAKER_01: to stay informed,
1:02:00
collaborate with the trusted financial institutions that you
1:02:04
have to be able to
1:02:05
SPEAKER_01: access these products.
1:02:06
SPEAKER_01: We provide a lot of information.
1:02:08
SPEAKER_01: We have details on our eligibility criteria.
1:02:11
SPEAKER_01: We have details on the home ownership process.
1:02:14
SPEAKER_01: We even have a frequently asked question.
1:02:16
SPEAKER_01: Just visit our website on www.kmrc.co.ke.
1:02:23
SPEAKER_01: Get to ask us questions.
1:02:25
SPEAKER_01: Please reveal the information that is there.
1:02:27
SPEAKER_01: We've provided a platform where you can ask as many questions as you can.
1:02:31
SPEAKER_01: And even if you feel like you want to visit our office,
1:02:34
SPEAKER_01: we are located at Old Mutual Tower on 27th floor.
1:02:37
SPEAKER_01: Please visit us.
1:02:38
SPEAKER_01: We will help.
1:02:39
SPEAKER_01: and support you through your home ownership journey.
1:02:42
SPEAKER_01: So thank you very much, Mukaya.
1:02:44
SPEAKER_01: That was a very good and engaging discussion.
1:02:47
I have seen a note on the timeline from Candy who says she has
1:02:50
learned so much on this space.
1:02:52
I think I joined her and many other people in saying that it's
1:02:56
eye-opening to
1:02:57
actually hear that there are single-digit mortgage solutions in
1:02:59
the country.
1:03:00
SPEAKER_02: So I think KMRC and the partners from Steve Masako and HF,
1:03:05
SPEAKER_02: really good work in terms of elaborating on these wonderful products.
1:03:09
SPEAKER_02: You've had their contacts.
1:03:10
SPEAKER_02: Please reach out to engage a bit more and get more information on this.
1:03:13
SPEAKER_02: Until next.
1:03:14
To hear again when we host again another space on affordable
1:03:17
housing solutions.
1:03:18
SPEAKER_02: Look out for more spaces like this with KMRC.
1:03:20
SPEAKER_02: We hold one each quarter.
1:03:22
SPEAKER_02: If you want a recap of some of the other spaces that we've held,
1:03:24
SPEAKER_02: you can check them out on our podcast on Mwango Capital Podcast.
1:03:28
SPEAKER_02: You definitely get them there.
1:03:30
So from Shlora,
1:03:31
Stella,
1:03:31
and Shadra Kondai,
1:03:32
I want to say thank you so much for joining us today.