A study of the effectiveness of the rural housing loan scheme in machakos district, Kenya
Kiamba, J. Mutisya
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The Rural Housing Loan Scheme was started by the government of Kenya in 1967. Its main objective was to assist the low income rural households in the improvement of their housing. This would be done by making loans available through the National Housing Corporation, which is the agency responsible for implementation of government housing programmes. However, after almost thirty years only about seven thousand housing units have been constructed through the scheme. This can be seen as an indication that the scheme has not been able to meet its original goal of assisting all low income households who were unable to improve their housing without government help. This study set out to find out why the scheme has not been as successful as expected. It also aimed at making recommendations as to how the scheme could be made more effective. Secondary data was collected by examining the project reports as well as materials in other public libraries. Primary data was collected through the uSe of questionnaires in the case study area of Machakos District. The study found that the rural housing loans had benefitted the middle and higher income groups. It had missed the low income households who were the original target group. This was largely due to weaknesses in the policy structure and poor implementation. For instance, the loan conditions stipulated that an applicant should show proof of a regular income and the ownership of a chargeable property such as a land title, an insurance certificate, or a share certificate. Another condition was that permanent building materials should be used in constructing the house. However, according to the results of this study, the majority of the low income households had irregular incomes since most of them were subsistence farmers whose incomes are available seasonally after the harvest period. Land certificates were also found to be unavailable to most of the households since the land registration process in the rural areas is not complete. These families also do not have insurance or share certificates. They rely on the extended family for help in case of calamities and they do not have the extra finances or the knowledge to invest in the relatively undeveloped stock exchange market. It was also found that the lack of resources had reduced the number of houses constructed through the Rural Housing Loan Scheme. The funds allocated by the government were able to meet the needs of less than 50 per cent of the qualified applicants. The organization of the implementation agency was also found to be inefficient. Most of its activities were based in the headquarters in Nairobi with limited representation in the rural areas. This therefore led to communication delays and wastage of time in the implementation process. The study has recommended that the loan conditions be changed by eliminating the need for proof of regular income and proof of security. Instead, the local cooperatives or village committees can be used to guarantee the loan. It has also pointed out that extra funds can be raised from the insurance companies and banks, and the Nat ional Social Secur ity Fund with the government act ing as the overall guarantor. A recommendation has also been made to accept the use of improved traditional building materials through the adoption of the incremental approach to the improvement of housing. Thus the idea of 'a house that grows' can be utilized to make use of the people's available resources and minimum outside assistance. However, there is need for setting the rural housing section as an independent department with autonomy in rural housing matters. Suggestions have also been made to decentralise this department to the district and divisional level. This would create more intensive contacts between the rural households and the rural housing officers, hence creating a positive climate for the improvement of rural housing.