Kenya’s first mortgage refinance company unveiled
Kenya’s first mortgage refinancing company was officially unveiled yesterday after 20 financial institutions subscribed as shareholders. This will create more accessibility for banks in obtaining long-term funds for home loans at a lower cost.
The KMRC is required to have a core capital of sh1bn according to regulations from the Central Bank of Kenya.The Board of the African Development Bank (AfDB) has agreed to loan of £100mn to help establish the KMRC. Debt will be raised from markets, including mortgage backed-bonds, to lend to bank and co-operatives using their mortgage loan contracts as a security.
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In a statement AfDB shared that this loan alrigns with the companies’ High 5s agenda, and in particular: Improving the Quality of Life for the People of Africa. The high cost of mortgages has prevented most Kenyans from take out home loans. Currently in Kenya, just 26,000 accounts hold mortgage loans. By providing this loan to KMRC, it will create better accessibility for Kenyan’s to own their own homes.
“As the company’s capitalisation has been finalised with 20 financial institutions subscribing as its shareholders,” the Treasury said yesterday.Treasury Cabinet Secretary Henry Rotich presided the opening of the Kenya Mortgage Refinancing Company (KMRC), he shared the stakes of each of the shareholders.