Kenya Commercial Bank and a local insurance company, Société Rwandaise d´Assurances (SORAS), have jointly launched a home guarantee insurance product geared at addressing housing shortage in Rwanda.The product dubbed, Collateral Replacement Indemnity (CRI), will finance up to the tune of Rwf45 million per house, targeting between 100 and 150,000 housing units per year.With 25,000 units needed annually to serve the housing demand, countrywide, experts say between 300 and 500 are built annually.Maurice Toroitich, Managing Director of KCB, predicted that the product would attract many people, especially young professionals. KCB introduced mortgage financing last year on the Rwandan market, which attracted many customers who are interested in owning a home. The bank invested Rwf12 billion in mortgage lending, last year, to build 300 houses and it intends to invest Rwf4 billion in the newly launched product."Many people are not able to save deposits that will build a house, it takes between four to five years,” Toroitich said.  "And by the time they raise that deposit property value has gone up and they will have lost five years on loan repayment.” The new product targets people in the middle to lower income mortgage market.Home loan guarantee programme is popular in South Africa, but soon will also be launched in Kenya."First it improves the demand for housing and makes it easy for people to buy,” Toroitich emphasised.He said there would be limited housing units worth Rwf45m and challenged developers to find opportunities to work with local authorities to develop affordable houses."Developers have expressed fear, whether there will be demand for low cost housing, but we (KCB) are providing end finance for developers,” he said.Currently, no specific place has been identified where to build the houses but it has to be in the municipal environment.Willem Van Emmenis, Chief Operations Officer of Home Finance Guarantors Africa Reinsurance, said the product has been successful in South Africa."We have managed to finance homes for 80,000 families in the last 20 years and I am optimistic that this will work for Rwanda too,” Emmenis said.He explained that they had to train people on borrowing and debt servicing, adding that educated borrowers were more likely to sort their debts compared to the uneducated recipients."Educated borrowers will take it serious to honour their obligation and through this they are creating more opportunities for developers and unlocking the supply chain,” Emmenis said.Mark Rugenera, Director General of SORAS general insurance, said the facility is targeting borrowers with monthly income worth Rwf1.8 million."I know Rwandans love to own homes because it provides stability and security to their families,” Rugenera said.The insurance company, he said, will benefit from insurance from the product and premiums from the houses’ cover.Rugenera is optimistic that the product would increase on the customers’ base which, in turn, will boost insurance penetration rate. The country’s insurance sector rose by 12.1 percent, reaching Rwf143.7 billion by the end of last year, from Rwf128 billion as of December 2010. Rugenera said, last year, SORAS general insurance recorded an increase of 28 percent to Rwf9.5 billion, from Rwf7.3b in 2010.According to the recent monetary policy statement, Rwandan insurance sector is well capitalised and profitable despite the low penetration rate. Insurance penetration is at 2.3 percent, less than the target of 10 percent for middle income economies.