Co-operative Bank has launched the country’s first pension-backed mortgage loan facility.
The mortgage facility issued in partnership with Enwealth Financial Services Limited, will allow customers to own a home through a mix of their pension contributions and a long-term loan.
Co-op Bank director for corporate institutional banking, Jacqueline Waithaka, says the new home ownership solution is a deliberate response of the bank in support of the government’s affordable housing pillar.
“We are excited to pioneer this innovation that will enable a wider pool of Kenyans to realise their dream of owning a home,” she said.
The patnership targets pension scheme members whose 40 per cent of their pension scheme benefits for buying a house cannot cover the full asking price of the targeted house.
In those circumstances, a member will approach the bank to access a credit facility to cover the difference.
It has a repayment period of up to 20 years, subject to the retirement age of the borrower.
Further, the patnership will see Co-op Bank extend a mortgage to such pension members to cover the shortfall, with the house serving as the collateral.
