Affordable Green Housing In Kenya And The Role Of Banks

Everyone needs a roof above their heads. According to the Worldometer, Kenya’s 2023 population is estimated at 55,100,586 people at mid-year. Kenya’s population is equivalent to 0.68 percent of the total world population. At the same time, Kenya ranks number 26 in the list of countries (and dependencies) by population.

With such a vast population, the housing demand has been growing yearly. According to Habitat for Humanity, Kenya has an annual housing demand of 250,000 units with an estimated supply of 50,000 units, culminating in a housing deficit of 2 million units, or an 80 percent deficit. Housing affordability is a crucial challenge in Kenya, with many people unable to buy or build their own homes.

The increase in population and the demand for affordable houses forced the government to develop the Affordable Housing project to construct at least 500,000 affordable housing units for Kenyans. But this seemed a tall order for the government unless private investors, too, gave it a hand with similar projects.

And with the world moving towards green in virtually everything, the demand for houses in Kenya has also shifted. Developers and potential homeowners are increasingly looking for projects that adhere to green energy and promote the same to secure and protect the earth, not just for the present generations but for the future, too.

Undoubtedly, the imperative for green affordable housing has become increasingly pronounced in Kenya, driven by environmental, economic, and social factors. As urbanization accelerates and the population grows, there is a rising demand for housing that not only addresses the pressing need for shelter but also considers the ecological impact of construction and living spaces.

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Green affordable housing in Kenya is crucial for mitigating the environmental footprint of the built environment, promoting sustainability, and enhancing energy efficiency. The emphasis on environmental responsibility and affordability is essential for fostering inclusive and sustainable development in Kenya’s rapidly urbanizing landscape.

With that in mind, leading lenders such as Stanbic Bank Kenya started a journey to pioneer green affordable housing projects through green housing financing, one of the unique products within the Kenyan banking sector. Stanbic Bank Kenya has a dedicated Real Estate team that is focused on providing end-to-end financial solutions across the value chain of their real estate clients. Additionally, they offer a competitive mortgage product offering for their retail clients.

Stanbic has partnered with IHS Kenya Limited to push for the uptake of green affordable housing finance in Kenya, in line with the bank’s commitment to sustainability anchored, among other things, enabling Kenyans access to environmentally friendly, affordable, and quality green housing solutions. Greenhouses reduce costs associated with energy use, water use, and maintenance.

To provide up to 4,000 affordable apartments for sale and rental within seven years, the bank will provide end-user financing support to enable Kenyans to acquire these affordable units in Kenya.

This partnership, according to Stanbic Bank, provides Kenyan homebuyers with access to eco-friendly, reasonably priced housing that comes with quality amenities. Additionally, it follows the Mortgage Relief provisions of the 1995 Income Tax Act cap 470, which helps reduce financial burdens. Homebuyers will also enjoy an extended loan tenure of up to 25 years, which gives them greater flexibility in repaying their loans. Moreover, Stanbic Bank’s commitment to a low fixed interest rate of 9.5% makes homeownership a feasible goal for a broader range of people in Kenya, ensuring affordability.

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