AFFORDABLE HOUSING

Boost for Big 4 agenda as CBK licenses mortgage refinance firm

As at June, company had raised Sh2 billion and National Treasury Sh35 billion

In Summary

• It is the first mortgage refinance company in Kenya, having been incorporated on April 19, 2018, under the Companies Act, 2015 as a Public Limited Company.

• KMRC’s principal objective is to provide long term finance to primary mortgage lenders.

National Housing Cooperation houses in Kilimani, Nairobi.
BOOST: National Housing Cooperation houses in Kilimani, Nairobi.
Image: /JACK OWUOR

The government's affordable housing plan under the Big 4 agenda has received major backing after the Central Bank of Kenya licensed the Kenya Mortgage Refinance Company.

This strengthens KMRC's position as a re-financing institution.

It is the first mortgage refinance company in Kenya, having been incorporated on April 19, 2018, under the Companies Act, 2015 - as a Public Limited Company.

“The licence has been granted pursuant to the CBK (Mortgage Refinance Companies) Regulations, 2019 after KMRC’s fulfillment of the stipulated licensing requirements,” CBK Governor Patrick Njoroge said in a statement on Friday.

KMRC's principal objective is to provide long-term finance to primary mortgage lenders - commercial banks, mortgage finance companies, microfinance banks and Savings and Credit Co-operatives, to increase the availability and affordability of mortgage loans to the public. 

Its shareholders are the government and primary mortgage lenders.

It is expected to support the affordable housing project. 

As of June, the company had raised Sh2 billion while the National Treasury mobilised an additional Sh35 billion from development partners to support its operations.

Treasury CS Ukur Yatani said the high cost of housing units and limited access to affordable long-term finance remain a leading housing market constraint.

He says KMRC will help address these challenges.

“The company will offer fixed-rate long-term loans at concessional rates to mortgage providers who are expected to pass the benefit to citizens at lower than market rates,” Yatani said.

In response to the Covid-19 pandemic, KMRC will help maintain adequate liquidity among primary housing mortgage providers (banks and Saccos), in order to keep housing finance and the market functioning.

“This will avert potential credit crunch that would hurt lower-income households and interrupt efforts to support affordable housing,” the CS said.

This new company is also expected to play a significant role in the structuring of the proposed National Credit Guarantee Scheme, in order to create an effective backstop mortgage guarantee component to cover the losses incurred by lenders on future home loans. 

Edited by R.Wamochie