NAIROBI, Kenya
Barclays Bank of Kenya has confirmed on-going plans to boost the local mortgages market by developing demand driven products and fostering partnerships with developers. As part of the strategy, Barclays Bank of Kenya (BBK) has already rolled out a fixed rate mortgage product featuring a 15.9% interest rate in the local market.
With the new Barclays Fixed Rate Mortgage, customers will enjoy fixed rate monthly repayments for the first three years of the mortgage term. Speaking during a virtual appearance on the Kenya Bankers Association (KBA) ‘My CEO Chat’ session, Barclays Bank of Kenya, Managing Director, Mr Jeremy Awori, said that plans to deepen the local mortgage market are under way. While acknowledging Kenya’s low mortgage penetration rate, Awori expressed confidence that, on-going campaigns will help more Kenyans to own their residential properties.
“The Kenyan mortgage market is an exciting area for growth given the relatively low penetration of mortgages in the industry and I, can assure that Barclays Bank would like to see much more affordable mortgage rates as a general principle to facilitate the mortgage industry growth,” Awori assured. And added: “We are also working with property developers to help attract prospective buyers and make mortgages accessible even to the middle and low income market brackets.”
To encourage mortgage uptake, Awori further confirmed that banks are now adopting innovative strategies geared at easing the mortgage application and processing challenges. Besides, unveiling fixed rate products, Barclays bank, he disclosed, has already adopted a system that makes the mortgage application process easier and convenient for its customers.
During the Virtual general customers’ conference organised by KBA, Awori confirmed that fixed costs associated with a mortgage process including the statutory stamp duty, insurance premium, legal and valuation fees amount to about 7% of the property value. He also encouraged self-employed individuals and entrepreneurs not to shy away from applying for mortgages. Self-employed individuals and entrepreneurs’ Awori explained stand an equal chance of accessing mortgage facilities and only need to demonstrate consistent income and ability to repay the mortgage.
“When you are self-employed, especially in the informal sector, it’s important to ‘formalise’ your income streams by channelling your funds through a bank account which comes in very handy when applying for a mortgage among other credit facilities,” Awori pointed out. To support local property developers, local banks, Awori said are also encouraging customers to consider buying fully built housing units as opposed to building their own units to help gain economies of scale advantage.
Property developers’ constructing wholesale units, he noted, receive better discounts from contractors and related construction material suppliers, ultimately affording them significant cost savings.
“My 15min chat with a bank CEO” is a month-long Kenya Bankers Association (KBA) event during which respective Bank Chief Executive Officers host online chat sessions, giving their views as well as both seeking and giving advice on various topical banking issues.
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