Housing Co-operatives, SACCOs as well as Investment units of these Societies appear to have given the state-run affordable housing program a wide berth.
A spot check of various players in the Housing Cooperatives Segment reveals lack of interest in the program by most while others cite numerous bottlenecks.
Savings and credit co-operatives (SACCOs) Top Executives who spoke to this publication point fingers at high interest rates, hidden charges in mortgage schemes and inadequate funding as stumbling blocks in the realization of the affordable housing dream.
“While were among the first Saccos to be involved in the affordable housing program, we have since slowed down our enthusiasm owing to the fact that the process of reimbursement from the Government has had delays. However, we are still encouraging those interested to get involved but we are not committing any funds towards that program,” said John Gitundu, Director, Tower Sacco Society Limited.
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Efforts to get comments from executives of some of the leading Housing Cooperatives such as Harambee Sacco and Mwalimu National Sacco were fruitless as our queries went unanswered.
“The affordable housing program seems to target mostly area located within the urban areas and thus we are yet to experience any demand from our members, who are mainly rural tea farmers and therefore would rather set up houses in the green spaces in the rural areas, “said Evelyn Moraa, Chief Executive of Sotico Sacco.
This publication also gathered views to the effect that mandatory deductions of the housing levy have largely been unpopular, hence the low uptake of affordable housing units and interest in the program.
Majority of Cooperative Society members, who are mainly informal sector borrowers, are inclined towards incremental financing and self-construction loans, which are mainly provided by co-operative societies.
Data from the Sacco Societies Regulatory Authority (SASRA) on sectorial credit lending by SACCOs during the year 2023 and shows that the Regulated SACCOs cumulatively issued a total sum of Ksh 460.47 billion with the bulk thereof amounting to Ksh 124.16 billion and accounting for 26.97% of the total loans disbursed going to fund the land and housing sectors.
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This was however a decline from a proportionate share of 33.24% of the sectorial lending which was advanced by Regulated SACCOs towards the lands and housing sectors of the economy in 2022.
The aforementioned credit disbursements were distributed between the land (purchase and acquisition) which received Ksh 63.62 billion accounting for 13.82% of the total sectorial lending; while the credit disbursements to housing (outright purchase or construction) amounted to KSh 60.57 billion accounting for 13.15% of the total credit disbursements made in 2023.
It is significant to note that comparatively, there was a drop in the proportion of credit towards land acquisition or purchase from 18.59% in 2022 to 13.82% in 2023, while the proportion of credit towards housing construction or purchase equally decreased from a high of 14.65% recorded in 2022 to 13.15% in 2023, thus resulting in the overall decrease in the proportion of credit disbursements towards land & housing.
The proportionate decrease in the credit disbursements towards land and housing sector of the economy is explainable by the sharp increase in the proportion of credit lending towards agricultural sectors of the economy which increased from 13.76% in 2022 to a proportion of 16.96% amounting to Ksh 78.10 billion in 2023.
Given the figures above from SASRA, SACCOs continue to play a key role in the provision of houses to members and the public. With a membership of about 14 million people, experts contend that Cooperative Societies have great potential to bridge the existing housing gap.
Okoth Jackson
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