The Kenya Mortgage Refinancing Company (KMRC) last week disbursed the first batch of affordable mortgage financing to banks, to a tune of Sh.2.75 billion
The amount was allocated to participating primary mortgage lenders (PMLs) including KCB Bank, HF Bank, Stima Sacco and Tower Sacco, each receiving KSh.2.13 billion, KSh.514 million, KSh.69 million and KSh.29 million respectively.
Funds for the debut loan were drawn from the World Bank line of credit according to a statement by the mortgage lender and provided to the financial institutions at a 5 percent fixed rate.
KMRC said the 5 percent per annum fixed initial lending rate will help mortgage lenders create new mortgages in the market on long term-tenor within single digits rates.
“Today’s disbursement of funds marks a historic new dawn in affordable housing finance in Kenya. It illustrates the legal, structural and strategic foundations that we have been putting in place since inception for a fit for-purpose mortgage refinance company,” said KMRC Chief Mr. Johnstone Oltetia.
The KSh. 2.75 billion is part of a KSh.4.5 billion mortgage loan portfolios available for immediate refinancing to participating financial institutions.
He said a number of institutions are currently preparing their mortgage portfolios based on KMRC’s eligibility criteria which will enable KMRC to review and release more funding in due course.
Mr.Oltetia also confirmed that KMRC is preparing to raise additional funds to support home loans through a bond issue in the third quarter of 2021 in partnership with the African Development Bank further support from the World Bank group.
The KMRC CEO said issuance of bonds will help cater for the market-based housing finance, beyond the refinancing of affordable mortgages which is capped at Sh.4 million within Nairobi metro; and KSh. 3 million elsewhere in the Country.
KMRC is looking to help the sector trim down non-performing mortgage loans with its focus on the lower income-owner occupier segment of the market.
The company wants to grow the number of mortgage accounts to at least 60,000 by 2022.