In the housing sector, a combination of franchising and government housing bonds avails an easy route to achieve countless affordable houses annually.
The process begins with the government designing and selling to the public, through selected commercial banks, housing bonds that upon accumulation to a given amount enables the bond holder to redeem into a mortgage deposit for different styles of houses at a participating bank.
Easily affordable bond denominations would avail a large pool of resources to drive the housing agenda.
At any given time only a very small percentage of the population would have accumulated the money required for a mortgage deposit.
This means the government would be holding large chunks of cash in the selected commercial banks which it would use to underwrite mortgages with these selected financial institutions which would finance the housing schemes under agreed terms.
National housing corporations or building agencies would partner with local authorities who would provide land for affordable housing schemes.
NHC would then construct model houses of different designs at different costs then franchises the designs to private developers countrywide who would sign franchise agreements with NHC to build (on land provided by regional authorities) and sell houses to citizens through participating commercial banks at agreed affordable set prices.
Upon redemption of bonds, workers place mortgage deposits with participating banks who sign financing agreement with a cap on the mortgage, guaranteed by the reserve funds held on behalf of government collected from bond subscribers yet to apply for mortgages.
Within a relatively short time, every worker would own an affordable home. Current models just won’t deliver affordable housing any time soon.
In healthcare, following the social franchise model, the government can deliver quality health care to the last citizen.
The process starts at a rejuvenated NHIF, with contributions classified into bands among the working population in order to support the young, the unemployed and the retired.
The higher your pay the higher would be your contribution and vice versa. Rwanda’s healthcare model is worth studying.
The national government would build and run only few national referral hospitals. Below every regional hospital would be three other levels which would be franchised to private practitioners, with the lowest being local clinics for quick diagnosis and treatment of common diseases.
The disease hierarchy would be cascaded upwards, with specialized treatment in the national hospitals.
The government would pay for treatment in the franchised and other hospital units through NHIF.
The CFW Clinics model in Kenya comes in handy in designing this delivery since it is a successful not-for-profit franchise model currently operational in some parts of central and western Kenya.
Many other government services can be delivered through a combination of e-government and franchising.
With crippling youth unemployment across the EAC, governments would standardize services and franchise to youth at ward level, thereby availing the service to more people at the easiest reach, reducing government employees and creating jobs for the youth. Such other services as water, sports, post office, revenue collection, waste collection and many others can be organized and delivered around social franchising, helping governments to resolve two issues at once- reversing the trend of burgeoning wage bills and creating jobs in the economy, ultimately generating better returns and higher GDP growth.
The writer is a Franchise Consultant helping indigenous East African brands to franchise, multinational franchise brands to settle in East Africa and governments to create a franchise-friendly business environment.
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