Kenyan banks to reduce mortgage rates to tap into growing demand for housing

Stanchart Kenya, one of the oldest banks in the country, has recently announced a significant reduction in mortgage rates as part of its strategy to tap into the growing demand for housing. In a recent interview with CNBC Africa, Paul Njoki, the Head of Wealth, Deposits, and Mortgages at Stanchart, shed light on the bank's latest moves and the broader implications of these changes. Kenya's real estate market has been identified as one of the fastest-growing in Sub-Saharan Africa, prompting Stanchart to reevaluate its mortgage offerings. Njoki emphasized the disparity between Kenya's mortgage penetration, currently at 2.5% of GDP, compared to countries like South Africa where it stands at around 30%. This stark contrast highlights the untapped potential in the Kenyan housing market, a gap that Stanchart aims to fill. One of the key points of discussion during the interview was the affordability of mortgages, particularly for young professionals entering the job market. Stanchart has positioned itself as one of the most competitive players in the market, offering mortgage rates as low as 11.9% and catering to a wide range of income brackets, from 55,000 shillings upwards. Njoki also highlighted the bank's flexibility in providing construction mortgages, enabling clients to build their homes with minimal down payments. In response to a question about further reducing mortgage rates, Njoki outlined a multi-faceted approach involving government initiatives for low-income housing, private sector contributions to sustainable construction practices, and collaborations with innovative developers. Stanchart's commitment to addressing affordable housing extends beyond Nairobi, with a focus on financing homes in other regions where real estate prices are more accessible. The conversation then shifted to Stanchart's wealth management services, which have seen increased interest post-COVID-19. Njoki elaborated on the bank's efforts to cater to clients' wealth needs holistically, from wealth creation to protection and transfer. Notable developments include the lowering of investment thresholds for government bonds and offshore investment opportunities, making wealth management more accessible to a wider range of clients. In conclusion, Stanchart Kenya's proactive steps to reduce mortgage rates and enhance wealth management offerings reflect a strategic shift towards addressing the evolving needs of the market. By expanding access to affordable housing and optimizing wealth management solutions, the bank is poised to make a meaningful impact on Kenya's financial landscape.