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President Kenyatta Launches Mortgage Company To Finance Affordable Housing


President Uhuru Kenyatta has launched the Kenya Mortgage Refinance Company (KMRC), a financial institution aimed at providing long-term loans to primary mortgage lenders.

The body will target primary mortgage providers including Banks, Microfinance Banks especially for the affordable housing pillar of the Big Four Agenda.

KMRC, which starts operations with an initial capital base of Ksh35 billion, was incorporated as a non-deposit taking financial institution under the supervision of the Central Bank of Kenya.

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Its role will be to source loans from big investors and multilateral lenders and act as a pool from which mortgage lenders in the country can draw from at affordable rates. The initial loans to kick-start KMRC were provided by the World Bank (Ksh25 billion) and the African Development Bank (Ksh10 billion).

“As we continue to experience the dividends of our growing population, the housing supply has, over the years, not kept pace with the concurrent growth in the demand for houses. As a result, this has led to a huge housing deficit, particularly for the lower income households,” said President Kenyatta.

The uptake of housing mortgages in Kenya remains below its potential with the Central Bank of Kenya statistics showing that the total outstanding mortgage debt in 2017 stood at about Ksh223 billion.

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This represents only about 2.74% of GDP, which clearly shows that the housing mortgage business in Kenya is still very small.

He said the Government expects that KMRC will contribute to more home ownership through cheaper mortgages.

“We expect the refinance company to significantly contribute to the development of the housing finance market in Kenya and help reverse the low mortgage penetration, by increasing the number of mortgages from the current 26,000 to over 60,000 by the year 2022,” the President said.

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KMRC will largely be financed through debt and equity.

The affordable housing loans refinancing will be capped at Ksh4 milion and Ksh3 million in Nairobi and the rest of the country respectively. Refinancing for market housing loans will be issued at market rates.

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Written by Francis Muli

Follow me on Twitter @francismuli_. Email

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