For several weeks now, a giant billboard erected by Fidelity Bank at the Nairobi railway station intersection has been attracting the attention of thousands of people who use the busy Uhuru Highway each day, announcing easy loans for construction.

Today, such commercial bank offers targeting salaried workers are commonplace and have been credited with extending Nairobi’s real estate boom to the city’s satellite towns.

Mr Andrew Mutwiri, who nurses a childhood ambition to amass wealth in real estate says such offers were almost unthinkable six years ago, forcing him to make what he calls “the bet of lifetime” to realise his dream.

Voluntary retirement

Mr Mutwiri was only 28 when he accepted a voluntary retirement package of Sh2.5 million to give up his position as a bank teller, a job he had held for close to eight years.

He walked out of his Sh74, 000 a month job before drafting an investment plan for his new found wealth.

His gamble to put money in real estate has paid off and now he is the owner of over five housing units, helped by the ongoing rush by commercial banks to introduce mortgage products to cash in on the segment’s boom.

Data from Central Bank of Kenya indicates that the credit that the banking sector extended to the private sector increased by 20.3 per cent from Sh738.3 billion in 2009 to Sh888.4 billion in 2010, with real estate absorbing the single largest share at 30.7 per cent of the total.

The financing outpaced 22 per cent of the private sector financing that were channelled to households — the traditional volumes driver of the easy loans of the banking sector.

The credit to the construction sector also dwarfs the 17.2 per cent that went to business services and the manufacturing sector’s 16.2 per cent.

In the absence of easy mortgage six years ago, Mr Mutwiri said he finally met a buyer who accepted to pay him Sh4.1 million for his Ongata Rongai home allowing him to clear the outstanding mortgage with the former employer.

The extra money raised from the sale became the seed capital that together with remittances of his partners living in the diaspora has enabled him to launch a multi million property business that is now working on its fifth unit on the outskirts of Nairobi.

Many other real estate enterprises that have spread their wings to the satellite towns of Nairobi have also reported rapid growth.

When the Business Daily first visited a freshly cleared site in Kiserian town early last year, the harsh climate and perennial water shortage made the area seem like an unlikely location for residential property.

Today, the first phase of the estate — situated just 100 metres off the road to Magadi —is now complete with all the nine houses already sold.

Source: Business Daily Africa