All public servants will from this month have access to cheap car loans and mortgages.
According to a circular by the Salaries and Remuneration Commission, the car loans will range from Sh600,000 to Sh10 million while the mortgage scheme will range from Sh4 million to Sh40 million depending on the grade of an individual.
The circular, signed by SRC chairperson Sarah Serem and dated December 17, 2014, is addressed to principal secretaries, county governments and heads of various public institutions.
The interest applicable to both the car and mortgage schemes is three per cent per annum on reducing balance. The duration of the scheme will be a maximum of 20 years for the mortgage and five years for car loan.
The major beneficiaries are Cabinet Secretaries, the Attorney-General, Chief of Defence Forces, Governors and the Auditor-General who will be entitled to a maximum of Sh10m car loan and up to Sh40 million for mortgage.
Principal Secretaries, chair and members of independent commissions and controller of budget will get up to Sh8m as car loan and Sh35m as mortgage.
The Director-General of the National Intelligence Service, Inspector-General of Police, Vice-Chief of Defence Forces, commanders of Kenya Army, Kenya Navy and Kenya Air Force and Director of Public Prosecutions will get up to Sh6 million as car loan and Sh30 million as mortgage.
The Registrar of Political Parties, secretaries of independent constitutional commissions, deputy governors, chief executive officers of government agencies, deputy IG, director of Criminal Investigations Department will get up to Sh5 million as car loan and Sh25 million as mortgage.
Public servants in grades S, T, U will get Sh4 million as car loan and Sh20 million as mortgage.
Those in grades P, Q, R will get Sh3 million car loan and Sh15 million as mortgage while those in grades K, L, M, N will get a car loan of Sh1.5 million and up to Sh10 million as mortgage.
MOTIVATE PUBLIC OFFICERS
Civil servants in grades G,H,J and equivalent grades in public service will get up to Sh800,000 as car loan and Sh6 million for mortgage while those in grades A,B,C,D,E,F and equivalent grades in public service will get up to Sh600,000 as car loan and Sh4 million as mortgage.
Mrs Serem said the benefits will facilitate state officers and other public officers to benefit from government funded loans.
She said the implementation of the benefits will motivate public officers and immensely contribute towards attraction and retention of requisite skills in the public service.
“The scope of the car and mortgage scheme shall include state officers and other public officers who are currently not enjoying these benefits and who are employed on permanent and pensionable basis,” she said.
The scheme for state officers serving in the executive and independent constitutional commissions will be administered and managed by the national treasury.
“Due to management efficiency, the scheme benefits for other public officers shall be administered and managed by individual government institutions and agencies,” said Mrs Serem.
She advised independent government agencies to prepare regulations to guide the implementation of the scheme and said the national treasury will provide requisite funds to operationalise the scheme.
County government will also be expected to set aside the funds through their budget process for the same.
“Financing may also be arranged through agreements between financial institutions and the individual government agency or organ within an agreeable framework to both parties,” said Mrs Serem.
Each government agency or organ will administer and manage the schemes internally and the same shall be subjected to annual audit.
“Whereas a state officer or public officer leaves employment for whatever reason other than disciplinary grounds, the terms of the loan remain in force and don’t change for the life of the loan unless in cases of default in which case it reverts to commercial terms,” said Mrs Serem.