Housing Finance lists Sh3b bond for trading at bourse
Housing Finance chief executive officer Frank Ireri at a past function. Housing Finance has officially listed its Sh3 billion bond issue for trading at the Nairobi Securities Exchange after it received Sh5.2 billion - equivalent to 78 per cent oversubscription - in a recent cash call. File
Mortgage Firm Housing Finance has officially listed its Sh3 billion bond issue for trading at the Nairobi Securities Exchange after it received Sh5.2 billion - equivalent to 78 per cent oversubscription - in a recent cash call.
The money is the second tranche of a Sh10 billion bond issued by the firm in 2010 when it received Sh7.2 billion against Sh5 billion target in the first issue.
The firm has however indicated that it is still exploring options to solicit for long term financing options to spur the mortgage industry by providing more affordable loans.
“We need steady long term funds which we shall endeavour to get even from international sources,” said Housing Finance Chairman Stephen Mainda.
The firm this year signed an international financing agreement for Sh2.2 billion with the European Investment Bank and over Sh800 million from the Ghana international Bank for onward lending.
Mr Mainda said that the firm would also enter into collaborations with persons with huge tracts of land to help bring up housing facilities.
Speaking when he opened the trading of the bond, Central Bank Governor Professor Njuguna Ndung’u said that there is a mismatch between the number of housing projects being undertaken in the country by individuals and the number of mortgage accounts recorded by lenders, saying that they would engage a consultant to find out why.
“Where is the money coming from? We need to engage a consultant!” quipped Professor Ndung’u, adding that mortgage players in the small and medium segments seemed to be the most affected.
“We understand that there are major constraints in the country especially on regulations but we must also seek to find out and formalise players in the housing sector to enable us develop products that can suit different market needs and keep track of developments in the country,” said the CBK Governor.
He cited lack of access to long term funds, credit risk due to lack of historical information, high interest rates and difficulties in property registration as factors afflicting the mortgage industry in Kenya.
“Kenya has faced rapid urbanisation in the past decade, but the housing sector is currently characterised by inadequacy of affordable and decent housing and low level of home ownership,” said Professor Ndung’u.
Housing Finance managing director Frank Ireri said that regulations governing the housing industry are a “tight noose” which should be eased a little bit to allow for more borrowers to take housing loans.
