News

Nation Media Group on Tuesday unveiled several improvements on its funded mortgage scheme that will allow more staffers to own houses.

Speaking during the signing of the scheme with mortgage financier Housing Finance, NMG chief executive officer Linus Gitahi said the scheme would benefit more of the staff unlike one the two firms entered into 10 years ago.

“It’s an initiative we have been working on with the staff and the board for a long time. For the first time we shall have a scheme that will enable every employee to be entitled to something, ” Mr Gitahi said.

The company has put in Sh300 million in the scheme that will benefit permanent staff. The applicants who qualify will receive finance of up to 90 per cent at a discounted interest rate of seven per cent per year with a repayment period of 15 years.

However, the entitlement will depend on the worker’s grade and the amount to be advanced and will be capped at Sh12 million.

The CEO told the staff to take advantage of the housing scheme to secure their future. It will cover purchase or construction of residential, commercial residential, purchase of plots and equity release.

“This will enable the families of NMG employees to be secure long after they leave the company’s service. We take this seriously and is the reason we have put that amount of money into the scheme,” Mr Gitahi said.

Housing Finance managing director Frank Ireri said the Sh50 million funded mortgage agreement signed in 1998 had translated into loans of up to Sh117 million for past and present staff.

“It has resulted in loans for both existing and retired staff . With this additional boost, we are grateful, and it is a sign of confidence in us and will enable more staff to benefit,” Mr Ireri said.

Advantage

He said the fund could translate to between Sh800 million to Sh1 billion in the long term. Mr Ireri said the interests were pegged as long as deposit rates remained unchanged.

“This is the advantage of the funded mortgage particularly in this period of global uncertainty that we are going through.

“I think there is no bigger satisfaction a borrower can get than knowing that in next ten years they will still enjoy seven per cent interest rates,” said Mr Ireri.

He said the scheme had an opening for those whose mortgage needs will exceed the limit set by the company.

“If an employee exceeds that limit within the rules of NMG and from our analysis is able to pay, we can lend the extra amount at commercial rates and have a blended rate being applied to the monthly payment,” he said.

Mr Ireri said the mortgage market was grappling with rising inflation and interest rates -factors they had no control over.

However, he said the credit crisis in Europe and America would not affect the local market because the fundamentals were different.

Deals with companies have become a major revenue stream for mortgage financiers in Kenya. Recently, Savings & Loan clinched a deal to finance housing for civil servants.