The Co-operative Bank of Kenya has made it easier for its customers to own a home through their pension contributions and a long-term loan in partnership with Enwealth Financial Services Limited.
The pension-backed mortgage facility has a repayment period of up to 20 years, subject to the retirement age of the borrower.
The facility in the market has been made possible by the recent changes to the Retirement Benefits (Mortgage Loans) Act, Regulations Amendment 2020.
The amendment to Section 38 (1A) of the Act allows members of pension schemes to utilise up to 40 per cent of their accrued pension benefits as down-payment to buy a home.
“In a defined contribution scheme, an amount not exceeding forty per cent of the member’s accrued benefit, subject to a maximum of Ksh 7 million,” reads part of the regulations.
“This product is a deliberate response by the bank in support of the Government’s affordable housing pillar of the Big Four Agenda,” Co-op Bank Property Hub, the Director Corporate Institutional Banking at Co-op Bank, Mrs Jacqueline Waithaka said during the launch Thursday.
“We are excited to pioneer this innovation that will enable a wider pool of Kenyans to realize their dream of owning a home.”
Speaking at the launch, the Chief Executive Enwealth Financial Services Mr Simon Wafubwa said, “Owning a home and having an adequate income at the point of retirement are the most critical pillars for a lifetime of financial well-being and dignity.