Treasury Cabinet Secretary Henry Rotich is set to unveil the Kenya Mortgage Refinancing Company (KMRC) today. During the event, the CS will also make public the stakes held by various shareholders in the company.
The government set up the Kenya Mortgage Refinancing Company last year as a key component in the realization of the affordable housing plan. The institution will play the part of a lender of last resort for banks and advance mortgages at lower rates, enabling commercial banks to further drive down mortgage rates in the country
KMRC has already begun its fundraising drive which involves raising money from capital markets in addition to allocations from government funds. Already, 20 financial institutions including the World Bank, Africa Development Bank and Shelter Afrique, have pledged financial support to the body.
“…the company’s capitalization has been finalized with 20 financial institutions subscribing as its shareholders,” read a statement from Treasury.
Apart from the World Bank and Africa Development Bank, some of the major shareholders in KMRC so far include the Treasury, commercial banks, deposit-taking savings and credit cooperative societies (saccos), and micro-financial institutions.
CBK recently published the Central Bank of Kenya (Mortgage Refinance Companies) Regulations, 2019, the regulations outline among other things, the business of mortgage refinance companies.
According to the regulations, KMRC will take part in four main activities; ‘refinancing or purchasing of eligible mortgage loans, investment in guaranteed debt securities, extending finance to primary mortgage lenders for financing of eligible mortgages, issuing of financial instruments, and other activities as may be prescribed by CBK from time to time.’
KMRC is required to operate with a core capital of KES 1 billion according to the regulations.