The Kenya Mortgage Refinancing Company (KMRC) has roped in support from the African Development Bank After the Board of the Pan-African Bank on Tuesday approved a KES 10.1 million loan to support the establishment of KMRC. The loan will aid access to affordable mortgage loans by lower and middle-income households according to the official statement by the bank.
KMRC is a non-Bank financial institution designed to provide long-term funding and capital market access to local lenders, including commercial banks, and Savings and Credit Cooperative Organizations to help consolidate the East African nation’s growing domestic mortgage finance market.
The Kenyan government, through the central bank, is setting up the KMRC as part of initiatives to overhaul and stimulate the demand and supply balance in the housing and mortgage finance market.
The Bank’s intervention is in line with its flagship High 5s agenda; specifically the objective of Improving the Quality of Life for the People of Africa. The loan will result in multiplier effects on industries related to the housing sector and creation of jobs in these value chains.
AfDB said the investment will complement Kenya’s ‘Big 4’ affordable housing national goal, and its plans to develop a self-sustaining affordable mortgage market. It will also promote inclusive finance through KMRC, whilst also assisting in creating new employment opportunities.
Through the Loan, the Bank adds on its initiatives to support affordable housing and development of mortgage finance institutions on the continent. As one of its priority objectives, the Bank supports investments that contribute to the widening and deepening of financial systems in Africa and enabling the private sector to mobilize and access long-term domestic currency funding locally.
AfDB joins the World Bank which last month approved a KES 25 billion loan to KMRC for the same purpose. The move by the financial institutions will ensure KMRC has a stable financial base as it seeks to enable more Kenyans plug into mortgage markets for home financing.