Saccos to attract more mortgage refinancing


Kenya Mortgage Refinancing Company (KMRC) hopes there will be increased healthy competition in the sub-sector that has been dominated by commercial banks after Saccos entered into the mortgage space.

They are now looking forward to making affordable housing a reality because Saccos offer loans at a low interest rate and are easily accessible to many people.

“Saccos play an important role in the realisation of housing and in mobilising funds for the purchase of land to put up housing besides raising capital for housing development,” says KMRC CEO Johnstone Olteita.

The CEO said Primary Mortgage Lenders (PMLs), mainly mainstream banks, have made an undertaking to lend at less than nine per cent but Saccos can lend at lower rates, because they incur less administrative costs.

“If a bank does not play ball, you go to a Sacco and that kind of competition is very good for a customer. It presents more opportunities and more options to a consumer,” said Olteita.

He said although Saccos don’t do mortgages in the country, they nonetheless lend to individuals and majority of funding they provide actually goes into housing.

“While Saccos may not have enough capacity, it is not too difficult to build their capacity if they can be offered liquidity,” said Olteita.

He said KMRC supports the affordable housing agenda by the government through availing resources in market because funding that has been done is majorly in the middle and upper income categories.

The CEO added that KMRC is pushing funding down market by creating eligibility for qualifications for affordable housing.

“I ‘m glad that when the first tranche of credit to lenders for onward lending to borrowers seeking long-term home loans at affordable rates was released, Stima and Tower Sacco, Kenya Commercial Bank (KCB) and HF Bank were the first beneficiaries among the primary mortgage lenders,” the CEO recalls. 

KCB received Ksh2.13 billion, HF Bank Ksh514 million, Stima Sacco Ksh69 million while Tower Sacco received Ksh29 million.

The KMRC Chief says the four institutions made successful applications and demonstrated a re-financeable mortgage portfolio of 1,400 mortgages, which acts as the collateral for the funding.

The CEO says the primary objective of KMRC is to operate as a private sector driven company with the public purpose of developing the primary and secondary mortgage markets by providing secure, long-term funding to the mortgage lenders, thereby increasing the availability and affordability of mortgage loans to Kenyans.

“Such facilities have been owned largely by the banks or institutions which use it for refinancing but by including Saccos, I believe would broaden the reach of housing finance to borrowers with low and informal incomes,” he said.

The Treasury-backed KMRC advances loans to shareholders, customers at 5% to enable them advance to their customers at higher rates but lower compared to 12% of the current market mortgage rates.

Macloud Malonza, the Chairman of Harambee Sacco,  which is among the Saccos that have been licensed to offer mortgage facilities from the KMRC says, after getting the green-light, they launched two mortgage products – Harambee Home Loan and the Harambee Jenga Loan.

“Statistics show that big percentages loans granted by Saccos to members go directly to supporting land purchase and or housing,” says Malonza.

“Since inception, we have been building financing to meet the market demands of providing loans to partners and customers to enable them to acquire affordable housing at cheap rates. We will announce the first lending by the end of September,” said Mr. Oltetia.

KMRC has recruited a good number of Primary Mortgage Lenders (PMLs) such as Kenya Police, Mwalimu National, Safaricom, Ukulima, Bingwa, Imarisha, Unaitas, Imarika, Tower, Stima and Harambee and the list continues to grow.

“My institution is committed to join efforts to reduce the huge housing supply gap and thus enable Kenyans to own homes,” the KMRC CEO affirms.

By Our Reporter

Get more stories from our website: Sacco Review. For comments and clarifications, write to

Kindly follow us via our social media pages on Facebook: Sacco Review Newspaper for timely update

Sharing is caring!

Not Allowed