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World Bank approves $250million housing fund for Kenyans

Currently, commercial banks in Kenya hold only about 26,000 mortgage loans of an individual value of KES 11,000,000.

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World Bank approves $250million housing fund for Kenyans
An apartment house in the city of Nairobi, Kenya.

The World Bank approved a $250 million International Bank for Reconstruction and Development (IBRD) loan to enhance access to affordable housing finance for Kenyans who are unable to access long-term housing finance.

The Kenya Affordable Housing Finance Project (KAHFP) will support the establishment and operations of the Kenya Mortgage Refinance Corporation (KMRC) -a largely private sector-owned and non-deposit taking financial institution under the supervision of the Central Bank of Kenya.

“We believe that Kenya’s vibrant private sector offers an excellent opportunity to crowd in privately held skills and resources towards achieving the country’s Big 4 affordable housing goals and in alignment with the World Bank Group’s Maximizing Finance for Development agenda,” says Felipe Jaramillo, World Bank Kenya Country Director.

He further went on to say;

“Urban housing currently remains unaffordable for most Kenyans due to the cost of financing, the short loan tenures and the high cost of properties.”

Currently, commercial banks in Kenya hold only about 26,000 mortgage loans of an individual value of KES 11,000,000. The interest rate cap of 2016 coupled with an overall Non-Performing Loan (NPL) ratio of 12% led banks to tighten their credit standards and offer variable rate loans locking out middle to low-income would-be homeowners.

Kenyans largely access loans from Savings and Credit Cooperatives (SACCOs) that are estimated to provide almost 90% of Kenya’s total housing finance.

“The project will endeavour to boost shared prosperity for all Kenyans by addressing rapid urbanization which often manifests itself through the development of slums,” says Caroline Cerruti, World Bank Senior Finance Specialist and Task Team Leader for the Project.

“The World Bank has supported many mortgage refinance companies in emerging markets, and Kenya has the right pre-conditions for KMRC to be successful, such as supportive macroeconomic conditions, well developed capital markets and financial institutions active in housing finance”.

KAHFP is expected to increase access to finance by tripling the proportion of urban households having access to a mortgage. The project will promote inclusive finance through KMRC serving SACCOs and microfinance banks, which target borrowers on low and irregular incomes.

Investment into affordable housing will have a strong economic multiplier effect given the number of linked sectors and could support 132,000 new jobs. Better housing conditions are also linked to improved health and education outcomes.

The project will be implemented through KMRC, the National Treasury and the Ministry of Lands and Physical Planning.

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Zimbabweans lament after price of bread rises by 60% overnight

Bakers said they were forced to hike their prices due to rising production costs

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Zimbabweans lament after price of bread rises by 60% overnight

The price of bread shot up 60 per cent overnight in Zimbabwe, in the latest blow for a population already struggling with spiralling living costs.

Zimbabweans can barely keep pace with the price rises that have rekindled fears of hyperinflation which reached 500 billion per cent a decade ago and forced the country to trash its own currency.

Already, many families live on one meal a day, with the country in the grip of a major downturn that has provoked biting shortages of basics such as fuel and medicine.

Bakers said they were forced to hike their prices due to rising production costs.

Electricity prices have “gone up significantly, the price of fuel has also been going up weekly, the prices of raw materials have also gone up including the cost of importing wheat,” said Dennis Wala, the president of the National Bakers’ Association.

Electricity is only available for around six hours a day, forcing many bakers to use generators to run their ovens.

“The bread manufacturer is at the end of the value chain and we have to factor in all these costs, but we don’t prescribe prices to our members,” Wala told reporters.

The price of a loaf of bread soared to 15 Zimbabwe dollars (around US$1) on Wednesday from nine dollars the previous day, according to a correspondent.

Bread is the second most important staple in the country after a thick cornmeal porridge known in the local Shona language as “sadza”.

After decades of mismanagement under former President Robert Mugabe, Zimbabwe reached absurd levels of hyperinflation in 2008-2009 when the central bank started printing money.

Mugabe’s successor, Emmerson Mnangagwa has failed to stop the latest inflation surge, last week begging for patience to bring the economy back from the “dead”.

But the economy is near breaking point.

Hundreds of thousands of government workers said this week they could no longer afford to report for duty as their wages had been rendered almost worthless.

Last week, the authorities quadrupled the price of electricity — which is already in short supply after a 400 per cent hike in August.

Earlier this month, the price of fuel rose more than 25 per cent, the latest in series of regular increases.

The official inflation rate was 290 per cent last month, but economists estimate it is at least double that figure.

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Nigeria to sign military cooperation deal with Russia

Nigerian President, Muhammadu Buhari is due to meet Putin on the sidelines of a Russia-Africa summit in Sochi

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Nigeria to sign military cooperation deal with Russia

Nigerian President, Muhammadu Buhari hopes to sign a military-technical cooperation deal with Russia at talks with President Vladimir Putin this month that will help it fight Boko Haram militants.

The Nigerian leader is due to meet Putin on the sidelines of a Russia-Africa summit in the Black Sea city of Sochi amid a push by Moscow to expand its influence in Africa.

“We’re sure that with Russian help we’ll manage to crush Boko Haram, given Russia’s experience combating Islamic State in Syria,” Nigerian envoy, Steve Ugbah said in an interview with Russia’s RIA news agency, adding that Nigeria was interested in purchasing Russian helicopters, planes, tanks and other military equipment.

Ugbah says a military-technical cooperation deal between Russia and Nigeria had already been drafted and that it is awaiting finalisation. 

“We hope President Buhari can take the talks to their logical end. The agreement will open new possibilities in such areas as the supply of military equipment and training for specialists,” he adds.

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Nigeria, Cameroon to plan Cocoa price cartel

The plan suggested by Nigeria is part of a trend by cocoa growers in West Africa and Latin America

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Nigeria, Cameroon to plan Cocoa price cartel

Nigeria aims to team up with Cameroon to agree on a premium for its cocoa with buyers, after the world’s top growers, Ivory Coast and Ghana set a price floor for the crop.

The plan suggested by Nigeria, the world’s fourth-largest cocoa producer, is part of a trend which has seen growers in West Africa and Latin America seek to influence prices in the global market.

The move follows Ghana and Ivory Coast’s union in July, which set the price for a ton of cocoa from their countries at $2,600 plus a $400 premium described as “living income differential”.

READ: Cocoa industry stakeholders accept Ghana, Ivory Coast price

Both countries produced 60 per cent of the world’s cocoa in 2018.

Vice President of the World Cocoa Producers Organisation, Sayina Riman says discussions will be held with the private sector and the Nigerian Government before formal talks are held with Cameroon.  

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