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Editorials

EDITORIAL: Hasten mortgage plan

KMRC
KMRC is expected to raise cash from sources like bonds for lending to banks for onward loaning to homes. FILE PHOTO | NMG 

The impasse over the take-off of the State-backed firm meant to boost access to cheaper home loans must be resolved swiftly with the release of regulations to guide the proposed mortgage plan.

For instance, the Central Bank of Kenya is yet to give the Kenya Mortgage Refinancing Company (KMRC) a licence more than three months after President Uhuru Kenyatta launched the firm. The permit hitch has been blamed on the delayed approval of regulations. Both the Treasury and CBK must move with speed and process the operation permit now that the regulations have been published.

The licence hitch has seen the World Bank and the African Development Bank (AfDB) withhold Sh35 billion funding that KMRC needs to start the process of lowering mortgage rates to below 10 percent, down from the market rate of 13.5 percent.

KMRC is also expected to raise cash from sources like bonds for lending to banks for onward loaning to homes, curing a problem that has seen lenders shy away from issuing housing loans on lack of long-term deposits to match mortgages.

But high-interest rates together with the lack of long-term deposits have been blamed for keeping mortgages out of the reach of many. There is now a real opportunity for this to be redressed.

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