Why Kenya needs Cooperative model to achieve affordable housing
Housing is a basic need, and it is in the interest of any country and its government to ensure that its people have decent housing. Equally, homeownership has several economic and social externalities – meaning that once you own a property, you have an asset that can be leveraged and that can provide a sense of security against potential economic shocks.
Homeownership can also be used as part of leverage to finance other discretionary and emergencies. Thus, the need for decent housing cannot be emphasised.
A homeowner is more likely to invest in their home that, in turn, raises their neighbours’ property values. For instance, a homeowner may be more likely than a renter to paint the exterior of their home, fix a hanging gutter or remove street debris outside their house. These actions may be intended entirely to improve the appearance of their home and, in turn, increase its resale value, but they also positively influence the values of the surrounding property. This whole aspect is known as a spillover effect.
Homeownership promotes economic equality. It has been argued that homeowners, on average, earn higher incomes and have higher savings than renters. Home is an investment with proven immeasurable benefits.
Home ownership has traditionally been the foundation of the average Kenyan’s growth in net worth.
With about 11 Saccos partnering with Kenya Mortgage Refinance Company (KMRC), many Sacco members are achieving their dreams of having decent homes, which previously were out of their reach. Expensive mortgage facilities locked out many.
A sectoral lending report by the Sacco Societies Regulatory Authority (SASRA) ranks land and housing sectors as the biggest borrowers of Sacco loans and accounted for 26.9% of the total credit facilities advanced by Saccos in the financial year 2021.
Affordable housing has been a cornerstone of the government’s agenda. However, housing is a community-wide problem that needs a community-wide solution. A complex solution that requires multi-prong strategies and partnerships to be sustainably achieved. Collaborative efforts between government, communities and the private sector are required which necessarily demands a new conversation; one that brings the intended beneficiaries into the board room. One mechanism for achieving this solution is to look to the cooperative movement, one of the oldest but most enduring forms of business in Kenya. Cooperatives, as community entrenched businesses, can be a catalyst that can revolutionize the housing sector through community-oriented, market-based solutions.
