Home kit maker International Green Structures Kenya Limited (IGS Kenya) and K-Rep Development Agency have announced a partnership to provide housing finance for affordable, high quality, prefabricated houses, ranging in price, for complete homes, from Sh800,000 to several million shillings.
By last year, high interest rates had seen more than 7m families locked out of home loans and only a fifth of urban Kenyans able to afford a home loan of Sh1m or more, according to The Mortgage Report from Hass Consult.
Rates have since doubled, reducing the proportion of Kenyans with access to homes and home financing to just a few per cent.
However, the roll out by IGS of pre-formed housing units that take just two to three days to construct, but last for 30 to 40 years, has seen K-Rep move to develop a microfinance product to fund the purchasing of the complete low-cost homes.
“Our goal is to ensure Kenyans are living in quality homes, and this can only be possible if the houses are affordable,” said Mr Julius Kamau President of IGStructures Kenya.
For K-Rep, the new housing units have opened an ideal opportunity to offer housing, at a time when the majority of K-Rep’s customers already own land.
K-Rep will assist the potential home owners in selecting the IGStructure that best fits their needs and financial abilities, and IGStructures will then make the house.
IGS homes can be made to a variety of floor plans and sizes, from just one bedroom, to as many bedrooms as suit the buyer.
For the families that qualify for the K-Rep funding, the loan, once repaid, will see them housed without further liabilities for rent, which is a shift many Kenyans are keen to make in owning their own homes.
According to The National Cooperative Housing Union, (NACHU), 84 per cent of urban Kenyans currently rent their homes, with households spending more than 30 per cent of their incomes on rent. In this situation, a lack of access to affordable financing has exacerbated many families’ difficulties in escaping the cycle of poverty.
At the same time, population growth has generated the need for at least 150,000 new homes a year, but only 23 per cent of this demand is being met, with the shortfall most acute for low and middle income households, which require 48 per cent of the sum of new houses.
“Now, we can develop a new service line of micro financing mortgages by partnering with IGS and their affordable housing solution. Our customers will be thrilled with the ability to purchase a new, affordable, sustainable and modern home for their families,” said Dora Waruiru, Managing Director of K-Rep Development Bank.
The IGS technology takes at most four days to erect. Once the builder completes the exterior finishes, only minimal interior finishing is required before the new home owner can move in.
IGS will educate and provide K-Rep Development Agency employees with the IGStructures house designs, finishing options and pricing that they the agency staff will then go through with potential clients. IGS is also selecting, certifying and monitoring authorized builders to ensure the houses are built to international standards and that customers receive a certificate of compliance and occupation.
IGStructures are made from Compressed Agricultural Fiber (CAF) Panels built onto a pre-engineered steel framing system, and are used to construct schools, hostels, army barracks and healthcare facilities, as well as homes.
The interior of the panels, which are as strong and solid as concrete, are made from rice and wheat wastes, which, when local production begins, will be sourced from Kenyan smallholder farmers.
IGS and K-Rep will be running the first round of financing and building as a pilot program focused on locations where the leaders in the communities have already successfully used K-Rep Development Agency micro financing services to improve their businesses.
“Our customers know how to make every shilling count and those who have seen the benefit of our micro financing loans to improve their businesses, will use the same type of service to improve their personal living situation, which for them is a game changer,” said Waruiru.
The agency will provide the available grants to rural, community banks where village members who have accounts in those banks will be able to apply for the housing loans. The maximum loan amounts and procedure and requirements will depend on the terms and conditions of the individual village banks, said K-Rep.
To meet the needs of the K-Rep pilot project, IGS Kenya has imported IGStructures from IGS Manufacturing Worldwide located in Fort Worth, Texas. It will then be producing future structures from its manufacturing facility in Thika, which will be operational in the first quarter of 2016. This will ensure IGS Kenya has enough panels to meet any future demand.
About International Green Structures
International Green Structures (IGS) offers a solution for the global housing crisis. To meet this need, IGS takes a renewable resource to manufacture Compressed Agriculture Fiber (CAF) Panels and combines them with a pre-engineered framing system, resulting in IGStructures. Permanent or temporary, IGStructures are durable, affordable, and can be built significantly faster than traditional building methods. They are culturally adaptable and ideal for homes, schools, healthcare facilities, large-scale accommodations, remote worker sites, and humanitarian needs.
With an in-country manufacturing facility, IGS provides an opportunity for rice and wheat farmers to earn a second income stream, promoting sustainability, jobs and greater agricultural food security and income. All IGStructures and building solutions are easy to construct creating jobs, training and certifications for youth in manufacturing, construction, and secondary finishing products using 95% local labor with obvious flow-on economic benefits. The outcome is high quality, very affordable and extremely durable IGStructures and building products that can be erected in a matter of day/weeks rather than months. IGS has successfully built affordable IGStructures in Kenya, Ghana, Uganda, and the United States.