10:55
rwandaexpress
Kenya commercial bank which invested in Rwanda 4years ago is set to partner with a Rwandan based insurance company to solicit housing shortage.
Apart from real contractors which has invested in housing and building of furnished apartments, estates and villas in Rwanda, Kenya Commercial Bank and a local insurance company, Société Rwandaise d´Assurances (SORAS), have jointly launched a homeguarantee insurance product geared at addressing housing shortage in Rwanda.
The product named, Collateral Replacement Indemnity (CRI), will finance up to the adjustment of Rwf45 million per house, targeting between 100 and 150,000 housing units per year.
Maurice Toroitich, Managing Director of KCB, predicted that the product would attract many people, especially young professionals.
KCB introduced mortgage financing last year on the Rwandan market, which attracted many customers who are interested in owning a home.
The bank invested Rwf12 billion in mortgage lending, last year, to build 300 houses and it intends to invest Rwf4 billion in the newly launched product.
According to the newtimes, with 25,000 units needed annually to serve the housing demand, countrywide, experts say between 300 and 500 are built annually.
The new product targets people in the middle to lower income finance market.
KCB CEO Toroitich reiterates that home guarantee improves the demand for housing and makes it easy for people to buy adding that there would be limited housing units worth Rwf45m. He urged developers to find opportunities to work with local authorities to develop affordable houses.
“Developers have expressed fear, whether there will be demand for low cost housing, but we (KCB) are providing end finance for developers,” said Toroitich.
Currently, no specific place has been identified where to build the houses but it has to be in the municipal environment.
Mark Rugenera, Director General of SORAS general insurance, said the facility is targeting borrowers with monthly income worth Rwf1.8 million.
Rugenera is confident that the product would increase on the customers’ stand which, in turn, will boost insurance penetration rate.
Rugenera said, last year, SORAS general insurance recorded an increase of 28 percent to Rwf9.5 billion, from Rwf7.3b in 2010.
According to the recent monetary policy statement, Rwandan insurance sector is well capitalised and profitable despite the low penetration rate. Insurance penetration is at 2.3 percent, less than the target of 10 percent for middle income economies.
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