Absa Bank Kenya received loans amounting to Sh3 billion from the Kenya Mortgage Refinance Company (KMRC) last year for onward lending to home buyers, disclosures from the listed bank show.
The Nairobi Securities Exchange-listed lender said the loan was obtained in two tranches, one for Sh2 billion with a 2035 maturity date and the other for Sh1 billion, maturing in 2031.
"The Sh2 billion loan from Kenya Mortgage Refinance Company (KMRC) was obtained on September 1, 2022, and has a maturity date of 01 September 2035. Interest is paid quarterly in arrears at a fixed rate of five percent," the part of the annual report.
"The Sh1 billion loan from Kenya Mortgage Refinance Company was obtained on September 1, 2022, and has a maturity date of September 1, 2031. Interest is paid quarterly in arrears at a fixed rate of 5 per cent."
The amount Absa tapped from the KMRC is the largest to a single financier for onward lending to homeowners behind KCB's Sh1.8 billion last year.
Stanbic Bank Kenya joined the stable of lenders rolling out home loans backed by KMRC, signing agreements with three developers to fund mortgages for home buyers including Superior Homes Kenya, Avic International Real Estate and Safaricom Staff Pension Scheme Registered Trustees.
Housing developers
Absa has partnered with housing developers such as Acorn Holdings to offer financing towards affordable student accommodation, among others.
The lender reported a profit after tax of Sh14.6 billion for the year ended December 2022, representing a 34 per cent growth in comparison to the previous year.
Customer loans in the period grew by 21 per cent to Sh284 billion.
Data from the mortgage refinancer shows loans advanced last year were valued at Sh6.8 billion from Sh1.3 billion in 2021, pointing to the corporation's increased capacity to finance cheap homes after locking in additional capital.
The fourfold jump has seen the refinancier's asset size expand to Sh21.4 billion from Sh9.8 billion previously.
The KMRC, a joint venture between the Treasury and private lenders, was formed to de-risk home loans for workers earning up to Sh150,000 a month as part of former President Uhuru Kenyatta's plan targeting to put up 500,000 houses in five years through 2022.
The firm provides funds to mortgage financiers for onward lending at an annual interest of five percent, allowing them to roll out home loans at single-digit interest rates.
The refinancer disburses loans to primary lenders such as banks in the form of long-term funds, to unlock affordable home loans for Kenyans.
The new borrowings include a Sh1.4 billion corporate bond raised in February last year, which served to diversify the KMRC's funding base away from equity financing.
The institution's private sector shareholders are banks and savings co-operatives, including Absa Bank Kenya, Co-operative Bank, Harambee Sacco, KCB, NCBA and Stima Sacco.
