Interview with Sam Muturi, KCB Director for Mortgage Business on the lender’s property bus tour project

KCB is one of the biggest financial service providers in the construction and home buying sector, financing projects worth billions of shillings, and earlier this year the bank announced that it was getting into construction and has been busy laying a foundation for this bold move. We sat down with Sam Muturi, the bank's director for mortgage business to talk about this and more

Question: Let's start with the bus tours (organised to take potential buyers to various projects). You have been pushing the concept quite a bit and you launched one in Kisumu not long ago...

Sam Muturi: We started the process of bus tours in 2009. Between 2009 and 2012 it was only in Nairobi. We partnered with developers we were financing to build house for sale to take interested people to their developments. We started with one bus, nowadays we do 10 to12.

 
After that we moved to Mombasa and Kisumu. We want to do Eldoret, Nakuru and other (major) towns. We've done bus tours in Mombasa twice. We started with one bus, the first day the bus was full we had to quickly look for another. Kisumu is also huge. Bus tours work well because by the end of the day you have a common group of people seated talking about what they want. 

Question: Are these bus tours open to your clients only? 
No, they are open to the world. You find within the people who come are real estate agents who want to know where the houses are, university students doing architecture... 

Question: Do you get any business from the people you take on bus tours? 
Yes. As some are applying for the loan we ask them how they heard about us. And you will see some saying bus tours. 

Question: You announced recently that you were getting into construction. Is KCB going into development itself or through partners? 
There are very few developers looking at the bottom of the market, the downstream. Houses that would go for 2, 3, 4 million. Essentially our job is to finance projects (the supply side) and buyers (the demand side). But we realized that we need to do more. We are in the process of getting into developments through joint ventures. We are looking at county governments, Saccos and, individuals who have large chunks of land. The demand for housing now is devolving, same way other activities are getting devolved. It means there is more demand for housing out there, and who is better placed to do that than the most experienced financial institution? We want to go into both commercial and social housing. 

Question: How do you intend to approach the question of social housing? That is a concept that is challenging even for governments 
What we would want to do is apply modern technology that will ensure that the houses are in good shape and our turnaround time is very short; and if we produce in mass we enjoy economies of scale so the general cost of construction goes down and we want to pass that to the buyer. That is the social part of it. If you compare that and what is being done on the market, we would be lower. We are not doing this for purely profit. We also have a social responsibility to create dignity around our people. 

Question: You are funding developers. Won't they feel that now we're competing with (you) the big guys? 
No, we are only producing 50,000 houses and the demand is 200,000. Most of the people are renting, probably less than 10 per cent of people own their houses. There is no competition; it is just a huge market. We will still continue supporting developers, but we will partner with some of them in joint ventures and such like arrangements.