The Kenya Mortgage Refinancing Company (KMRC), which was launched on Wednesday, will begin its operations early next month – issuing bonds and mobilising funds from global financiers.
KMRC, the country’s first secondary mortgage financier, is expected to slash interest rates on home loans to single digit from the current rate of 13.5 per cent.
KMRC, which is being fashioned as an implementing arm of President Uhuru Kenyatta’s affordable housing plan, will advance cash to commercial banks, saccos and mortgage companies for onward lending to individual home buyers at rates below 10 per cent.
“Once operational, KMRC will support a large number of creditworthy potential borrowers who are not able to obtain loans at the moment,” President Uhuru Kenyatta said on Wednesday.
Kenyans earning monthly salaries of Sh150,000 and below will be able to obtain loans at single digit rates. However, those earning upwards of Sh150,000 will continue to access home loans at market rates.
KMRC has so far mobilised Sh37.2 billion – a mere drop in the ocean considering that the 26,187 mortgage accounts that commercial banks currently hold are worth Sh223 billion according to statistics from the Central Bank of Kenya.
It is hoped that the company will enable mortgage financiers to issue 50,000 home loans in five years. The country’s mortgage book stood at 26,187 in December 2018.