Businesses & Financial News

KMRC has serviced 1,427 mortgage loans in 12months

By Eunice Wawuda

Financial services company, Kenya Mortgage Refinance Company (KMRC) has been lauded for improving liquidity with lending institutions, contributing towards the increase in mortgage uptake in the country.

Since its debut Sh2.8Billion loan issue, the institution has since serviced 1,427 mortgage loans.

“In our view, KMRC has so far performed well. However, in order to achieve its 5-year objective of financing over 50,000 homes, KMRC needs to increase its fund base by fast tracking its green bond issue and fostering worldwide partnerships to not only learn, but also acquire more funding,” noted investment firm Cytonn in its weekly sector review.

Further, analysts at Cytonn wants the government to among other factors encourage the use of alternative building materials to lower construction costs, review public private partnership framework to enhance effectiveness, fast-track incentives, and allocate more funds into the refinance company to boost liquidity and subsequent mortgage uptake.

KMRC was unveiled last year after 20 financial institutions subscribed as shareholders. It is expected to create more accessibility for banks in obtaining long-term funds for home loans at a lower cost.

The KMRC is required to have a core capital of sh1bn according to regulations from the Central Bank of Kenya. The Board of the African Development Bank (AfDB) has agreed to loan of £100mn to help establish the KMRC. Debt will be raised from markets, including mortgage backed-bonds, to lend to bank and co-operatives using their mortgage loan contracts as a security.

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