First Home Project, by Rogam Investment Limited, located past Mlolongo town, along Mombasa Road PHOTO| COURTESY
Dozens of Kenyans are staring at an uncertain future after a popular real estate firm mysteriously shut down with millions of shillings in clients’ savings.
Simple Homes Housing Co-operative, a firm that had promised prospective members affordable mortgages on property around the country, has shut down operations, leaving behind a trail of anger and disillusionment.
Clients who had paid up hundreds of thousands of shillings in upfront deposits and membership charges were last week shocked to find the firm’s offices in Westlands’ Centenary House shut while customer care lines had been disconnected.
“I paid up a total of Sh273,000 and was supposed to pay the next tranche so that I can receive my share certificate, but from January this year, they started taking me round in circles,” said Harun Mwaniki, one of the would-be homeowners.
Launched in late 2015, Simple Homes promised potential homeowners a low-cost model of obtaining a home under an Islamic financing product, Musharakah.
Social media wrath
This meant that prospective home owners would co-own their houses with a Sacco registered under Simple Homes.
Under Musharakah, prospective home owners would not be charged any interest, but would co-own the houses with the Sacco until they fully paid for them.
A Sh6 million home would, therefore, retain this price until the end of the repayment period, unlike with a regular mortgage, which carries an interest rate of 14.5 per cent.
When Simple Homes rolled out its property products early last year, its model drew plenty of interest, particularly on social media.
But it soon began to draw criticism, with some social media users questioning the practicability of mortgage terms that reached 40 years and the firm’s reluctance to conduct site visits.
“I was to go for a site visit for a property in Lang’ata in January, but when I called them to inquire at the middle of the month, they pushed the site visit to April. After a while, the phones went dead,” said Mr Mwaniki.
The firm’s website and social media pages, which had attracted a huge following, have since been pulled down.
Since reports of the closure of the company’s offices began to spread online, more members of the Simple Homes Sacco have come forward and formed a WhatsApp group that has 34 members so far. More complainants are expected to join as police continue to take statements.
“There are some of our members who have been paying from as far as the US. However, from the beginning of this year, they have not been able to make payments as phone lines were not going through, and the management could not be reached,” said Mr Mwaniki.