Shelter Afrique targets housing co-operatives for growth

Nairobi, May 27th, 2014. Pan African housing and urban development financier, Shelter Afrique is courting housing Saccos across the country; as it engages new ways to provide affordable housing to all Kenyans.

Addressing a group of Housing Saccos at a Nairobi hotel, Shelter Afrique’s Director of Business Development and Operations Femi Adewole said the company was keen on keying into the schemes and solving the challenges of housing being faced by member of various saccos.

“Most co-operatives have acquired landed properties which have been allocated to their members, what members need now is not land but a decent home, unfortunately most members cannot afford the lump sum to build on their allocated land. We have entered into deals with some saccos to finance development of decent but affordable housing for their members,” said Mr. Adewole.
High Bank rates

In a presentation anchored by Senior Investment Officer Maureen Katuversiraiuna and Team Leader of Direct Lending, Kahumbya Bashige; Bashige noted that loan facility and proper land documentation are usually a slow process; hence members may not get the requested facility from commercial banks to develop houses.

“There is also the issue of interest volatilities with commercial bank. We all recall the aftermath of the 2012 interest volatility which saw the interest rates on bank loans rise to as high as 25%. Shelter Afrique is able to offer a fairly stable interest regime because our sources of funding are different from those of commercial banks,” said Mr. Adewole added.

In the year 2012, Shelter Afrique extended a Ksh395 million development loan to Stima Investment to construct Stima Village – a 156 housing units project in Syokimau. In the ongoing Stima Village development, Shelter Afrique is stepping in to fund the development of 76 maisonettes, forty 40 three-bed roomed and 36 four bed roomed units.

In 2011, Shelter Afrique signed a Ksh560 million loan agreement with the Kenya Medical Association (KMA) Housing Co-operative Ltd to provide financing for its housing project. The KMA project is a comprehensive mixed user development comprising of 157 units consisting of 3-5 bedrooms of different types between 160 sq meters to 227 sq meters. The project is located in Mavoko, 1.1KM off Mombasa Road.

The Stima Village project and KMA Housing Project, Adewole disclosed, are some of Shelter Afrique’s major middle level investments geared at raising Kenya’s housing supply capacity.

“At Shelter Afrique, we are actively extending support to such projects as Stima Village and the KMA Housing projects as part of our corporate commitment to boost supply of affordable housing units for Kenya’s growing middle class among other social classes,” Katuvesirauina also added.
Incremental financing

The company has also partnered with Microfinance institutions to provide incremental financing for those willing to improve their housing. In February this year, Shelter Afrique signed a Ksh100 million low cost housing financing deal with Rafiki Microfinance Bank which will be extended to individuals seeking to own decent homes.

Under this program, Rafiki Microfinance Bank will disburse loans as low as Ksh20, 000 for home improvement, going up to Ksh5 million for mortgages in any across the country.

Shelter Afrique the Pan-African finance institution exclusively supporting the development of the housing and real estate sector in Africa signed an MOU (Memorandum of Understanding) with CITIC Construction, one of the biggest multinational construction and engineering companies and IFC, the International Finance Company. The new partners envision funding large scale affordable housing projects in the sub-Saharan African region.

The agreement which is expected to boost Shelter Afrique quest in providing housing for all, was signed by the Managing Director of Shelter Afrique, Mr. Alassane Ba; Vice President of CITICC, Mr. Mingguang Xu and the Head of IFC in the East Africa Region, Mr. Manuel Moses.

The MOU’s objective is to create an efficient platform for the delivery of large-scale affordable housing projects across Sub Saharan Africa with the initial focus in markets like Kenya, Rwanda, Nigeria and Ghana where SHAF has an existing project pipeline.
Each company is expected to play a role in this partnership; CITICC will undertake to leverage resources to conduct feasibility studies, cost analysis and overall project planning as well as mobilize the necessary financing through its banking relationships. It also looks to act as the Engineering Procurement Construction contractor for each project, subject to consent of all parties.

IFC on its part will engage to provide or mobilize construction or mortgage financing on its own or through liaising with other financial institution and Shelter Afrique is expected to leverage its existing resources to source qualified projects and identify the local partners.
It will be recalled that Shelter Afrique had signed an MOU earlier in the year with Zamfara State. This brings the number of such agreements to two; showing Shelter Afrique’s strong commitment to building lasting partnerships.

The Managing Director, Mr. Alassane Ba expressed his pleasure and delight at the beginning of a strong partnership with CITIC and his hope that the agreement will add value to Shelter Afrique in achieving its objectives.
He also added that Shelter Afrique has a vision which it is close to realising and without strong partnerships like the one with CITICC Shelter Afrique will not be able to achieve its vision.

For his part, Mr. Xu Mingguang congratulated Shelter Afrique and expressed his pleasure and honour at signing the MOU and declared that it was an honour he was sharing with all members of the CITIC family; he also commended Shelter Afrique for doing an excellent job in the field of social housing.