Refinance company to provide mortgages

Kenya’s new mortgage refinancing company aims to raise Sh5 billion in the capital markets in the next year or two.

Kenya Mortgage Refinance Company (KMRC) was set up to help many would-be homeowners who struggle to secure a mortgage. 

KMRC is intended to provide affordable houses by making it easier for banks to access long-term finance for home loans.

It will issue mortgage-backed bonds and other instruments to lend to banks and financial cooperatives using their mortgage loan contracts with customers as security.

President Uhuru Kenyatta has made providing 500,000 new affordable homes by the end of 2022 one of his top four priorities.

The country has an estimated 200,000 annual shortfall, which is expected to rise to 300,000 by next year.

“Housing mortgage finance in Kenya remains below its potential,” Kenyatta said during the launch of KMRC.

Total outstanding mortgage debt stood at Sh223 billion in 2017 (2.7 per cent of GDP), according to Central Bank data. South Africa’s mortgage industry is 31 per cent of GDP.

The President yesterday visited Parkroad Estate in Ngara where the government is building 1, 370 houses with the first phase of 228 units expected to be ready by September this year.

The housing project is part of Big Four plan to construct 500,000 affordable housing units by 2022 under the Housing Pillar.

The President who was accompanied by Transport and Infrastructure CS James Macharia and his Treasury counterpart Henry Rotich encouraged the contractor to ensure everything is done according to standard.

He said the project will be used as a pilot and will be replicated in all other towns in the country.

“This project will be used as an example for all the other projects which we will do in other towns like Mombasa, Kisumu, Eldoret,” the President said.

While addressing workers at the housing project, President Kenyatta encouraged them to ensure they enrol for Huduma Namba. The Head of State instructed the Nairobi Regional Commissioner to ensure registration clerks are deployed to the construction site on Thursday to ensure all the construction workers are registered.