MPs fight to double home loans to Sh6bn

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Each lawmaker receives a Sh15 million mortgage. Photo/FILE 

By ALPHONCE SHIUNDU ashiundu@ke.nationmedia.com
Posted  Sunday, November 20  2011 at  22:30

Members of Parliament are fighting to have their multi-billion shilling home loans scheme doubled in the next budget.

They have approached the Treasury seeking more money in the next Parliament to buy or build residential houses as soon as they take office in 2013.

The Clerk of the National Assembly, Mr Patrick Gichohi, on Sunday told the Nationthat the House had sought a meeting with the Treasury to make sure that an “agreeable amount” is put in place to cater for the expanded Parliament.

Mr Gichohi said the Treasury and Parliament had not agreed on the amount, but that from the working estimates, the amount would increase from the current Sh3.4 billion.

Each of the current 224 lawmakers is entitled to Sh15 million to buy homes in Nairobi for their immediate families.

“We have not yet agreed on the ceiling. That’s why the mortgage committee is discussing with the Treasury to see what the ceiling would be, before we know what each member will be entitled to,” said Mr Gichohi.

Working estimates show that the next Parliament of 418 MPs will require a minimum of Sh6.3 billion to buy or build houses in Nairobi, but that is if the Treasury insists on the maximum Sh15 million per MP.

However, Mr Gichohi reckoned that the property prices had increased in the city and therefore it was inevitable that the entitlement for each of the MPs be increased to reflect the current property prices.

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He said the 2012-2013 Budget is being worked on, and it was prudent for Parliament to also plan ahead so that there’s no crisis when it comes to accommodating the extra 124 MPs.

Three per cent per annum

There was apprehension that the proposal was meant to increase the mortgage from Sh15 million to Sh20 million per MP, but the Clerk said, the Treasury and Parliament had not settled on a definite amount.

“What the Gazette Notice did, was to ensure those MPs with houses in Kiambu, some parts of Rongai and some parts of Runda are included under Nairobi,” he said.

MPs that have identified property in Nairobi are entitled to 90 per cent financing through the mortgage. The areas outside Nairobi only get 80 per cent of the total property value.

The MPs pay the loans back at three per cent per annum on reducing balance.