Mortgage Lender, Shelter Afrique, Out of the Red With USD 16.2 Mn Funding From Kenya

Shelter Afrique’s came out of its loss-making streak with funding from the government of Kenya totalling USD 16.2 Mn, monies disbursed to it from 2017 to 2019.

This marks the first time the company posted positive results since the Ksh 500 Mn (USD 5.1 Mn) loss recorded in June 2018 into a  Ksh7.8 Mn (USD 78, 000)  net profit as on June 2019,  against budgeted loss of Ksh72 million (USD 0.72 Mn).

“Kenya has been supportive in many ways. Whenever we called upon the Kenyan government, we have always received positive support. Additionally,  Kenya is one of the countries we’ve financed single largest projects which conform to our affordable housing strategy, and we’ve found ourselves working in tandem in many fronts involving the development of affordable housing,” Nghidinua Daniel, Shelter Afrique Chairman said.

Kenya is one of the 44 member states who own the company, set up to lend to governments in construction of houses to tame the over 40 million housing units gap in Africa. Nigeria leads the pack with 17 million housing deficit.

The company is also restructuring its debt payment with agreements from its lenders. The company seeks to retire the USD 110 Mn debt in five years.

“We successfully negotiated and concluded debt restructuring agreement with all our eight lenders and effectively restructured the US110 million debt to be repaid over five years from the existing loan book, with a bullet payment in the fifth year,” Andrew Chimphondah, Shelter Afrique Managing Director and Chief Executive Officer said.

In its 2018 full year report, the firm said that declining member state subscriptions affected its earnings. “This was also manifested by the sharp decline in payments for capital subscriptions from the member states within the current reporting period. It has become more pressing for the Company to now resume underwriting new business in 2019,” Nghidinua Daniel said in the report.

Some of the projects the Company has launched this year in Kenya include Richland Pointe, Everest Apartments, and Karibu Homes. The Company has also invested in the Kenya Mortgage Refinance Companies (KMRC).

Feature Image Courtesy: Construction Review Online