Cytonn launches home ownership savings platformJanuary 21, 2020
NAIROBI, Kenya, Jan 21 – Cytonn Investments has launched the first Home Ownership Savings platform within a regulated collective investment scheme, Cytonn Affordable Housing Investment Plan (CAHIP), whose key objective is “Building a deposit towards your housing”.
As part of the Finance Bill 2019 that was assented to by the President on November 7th 2019, the scope of approved Institutions which can hold savings towards Home Ownership Savings Plan was expanded to include Fund Managers and Investments Banks registered under the Capital Markets Act, effective January 1, 2020.
Cytonn Investments, who has structured CAHIP, has partnered with the Cytonn Money Markey Fund managed by Cytonn Asset Managers Limited, to provide those saving towards home purchase with an attractive investment proposition, compared to those currently available in the market, with the target yield of 11.0 percent per annum.
Speaking at the launch, Cytonn Chief Operating Officer, Shiv Arora said, “We are constantly striving to provide creative and innovative solutions in support of the government’s affordable housing agenda and Cytonn Affordable Housing Investment Plan (CAHIP) is one of those solutions. CAHIP will provide individuals saving towards home purchase with an attractive investment proposition, compared to those currently available in the market, and thus enhance their ability to purchase or construct a residential house.”
“Potential home buyers will benefit from CAHIP through; (i) accessing a flexible platform for savings towards home purchase, (ii) tax advantages with a reduction of their taxable income to a maximum of Sh8,000 per month or Sh96,000 per annum, in addition to a tax exemption on interest income earned by the depositor on a HOSP deposit of up to a maximum of Sh3.0 million, (iii) relatively high returns compared to the market, with a target yield of 11.0 percent, and (iv) a relatively low initial investment of Sh1,000 and minimum monthly contribution of Sh1,000, ‘’ he stated.
In addition, CAHIP provides a platform that will enable individuals develop a credit profile, as the savings made by a subscriber act as proof to a financial institution of their creditworthiness, thus raising their chances of accessing a mortgage loan upon maturity of the savings, in addition to encouraging a savings culture which ultimately makes it easier for an individual to acquire a home by efficiently raising a deposit for a house loan.