Kenya’s first mortgage refinancing company that will make it easier for banks to access long-term funds for cheaper home loans will be launched today after 20 financial institutions subscribed as shareholders.
Treasury Cabinet Secretary Henry Rotich, who will preside at the unveiling of the Kenya Mortgage Refinancing Company (KMRC), is also expected to make public the stakes held by the shareholders.
Major shareholders include the Treasury, the World Bank, commercial banks, deposit-taking savings and credit cooperative societies (saccos) and micro-financial institutions.
The company will raise debt from markets, including mortgage-backed bonds, to lend to banks and co-operatives using their mortgage loan contracts with customers as security.
Mortgage firms have shied away from writing housing loans mainly due to a lack of long-term deposits in the industry to match them.
“As the company’s capitalisation has been finalised with 20 financial institutions subscribing as its shareholders,” the Treasury said yesterday.
The KMRC, which must have a core capital of Sh1 billion according to regulations developed by the Central Bank of Kenya, is designed to refinance primary lenders, enabling them to offer mortgage loans at single-digit rates.
The high cost of mortgage has restricted most Kenyans from accessing homes loans, with commercial banks holding just about 26,000 such accounts currently.