The government plans to use blockchain technology to deal with allocation and funds management of the cheaper 500,000 housing units.
The agenda will be financed by National Housing Fund under Finance Act 2018 with a three per cent contribution by employers and employees, borrowing, issuance of asset-backed securities to investors and rental revenue from current available housing stock.
Housing and urban development PS Charles Hinga said the fund will raise Sh6 billion a month translating to Sh55 billion a year to unlock the supply side of projects.
CS Transport and Housing James Macharia said the country needs Sh3.2 trillion to build a million houses.
“Kenya will use blockchain technology to ensure the rightful owners live in government funded housing projects,” Hinga said during the second urban dialogue on affordable housing agenda with the World Bank in Nairobi yesterday.
Blockchain technology, which also powers the cryptocurrency transactions, allows records to be stored separately and linked using a secure code making it impossible to modify data.
Hinga said the ratio of mortgage to rent in Kenya is 6:1 with affordability of the properties a challenge. But even as the government is set to build houses that will cost between Sh300,000 and Sh3 million in various identified lands, the dilemma has always been on graft fears arising from beneficiaries and even legislators.
Hinga acknowledged that Kenyans have lost trust in what the government does especially with housing and previous fiscal wastefulness of capital intensive projects such as National Youth Service scandals I and II.
“You should not pay more than 30 per cent of your disposable income to own or rent a home. For an average formal sector earning of close to Sh50,000 per month, one should pay at most Sh15,000 for rent,” Mwaura said.
Early this year, ICT CS Joe Mucheru said the ministry would set up a task force to explore how the blockchain technology can be harnessed to improve transparency and efficiency in the public and private sector.
Central Bank governor Patrick Njoroge has in the past also advised on the blockchain technology to improve service delivery, despite warning consistently against the use of the use of virtual currencies as an asset class or a currency.