Sh2.75bn boost for housing projects

By Roy Hezron

Stima and Tower Saccos are among the first four Primary Mortgage Lenders (PMLs) to benefit from the Sh2.75 billion Kenya Mortgage Refinancing Company (KMRC) kitty.

The disbursement done on 17th December 2020 saw Nyandarua based Tower Sacco which is a get Sh29 million while Stima Sacco got Sh69 Million.

The two Saccos made successful applications and demonstrated a refinanceable mortgage portfolio of 1400 mortgages, which acts as the collateral for the funding.

Members of the two Saccos will now get mortgage loans to ease the burden of acquiring their dream homes and transforming them into landlords and landladies.

Speaking during the disbursement KMRC’s Chief Executive Officer Mr. Johnstone Oltetia said they will continue innovating around fixed long-term financing to participating PMLs to speed up the uptake of home loans.

“KMRC is preparing to raise additional funds to support home loans through a bond issue in the third quarter of 2021,” said Oltetia.

He added that an agreement has been reached with African Development Bank (AfDB) to provide a partial credit guarantee, with further support from World Bank.

He said the issuance of bonds will help cater for market-based housing finance beyond the refinancing of affordable mortgages which is capped at Sh4 million within Nairobi metro, and Sh3 million elsewhere in the Country.

The disbursed amount is part of Sh4.5 billion mortgage loan portfolios available for immediate refinancing to participating financial institutions.

“Today’s disbursement of funds marks a historic new dawn in affordable housing finance in Kenya. It illustrates the legal, structural and strategic foundations that we have been putting in place since inception for a fit for-purpose mortgage refinance company,” said Oltetia.

“Saccos do not have capacity but it is not too difficult to build capacity for them to be able to offer mortgages,” said Olteita.

Kenya Commercial Bank got a lion’s share of Sh2.13 billion in the disbursement while Housing Finance (HF), the only mortgage lender in the group, received Sh514 million.

Participating financial institutions have been encouraged to submit applications for refinancing.

“There are more participating institutions that are at an advanced stage of accessing funding from KMRC. They are presently preparing their mortgage portfolio based on eligibility criteria, and once submitted we will review and release more funding in due course” said Mr. Oltetia.

Others Saccos to be refinanced by KMRC include Kenya Police, Mwalimu National, Safaricom, Ukulima, Bingwa, Imarisha, Unaitas, Imarika and Harambee Saccos.

KCB and HF Bank are among the seven local banks that have committed to set aside Kshs.365 billion worth of mortgages for the Affordable Housing Programme.

Others financial institutions on-boarded include Diamond Trust Bank (DTB),  Absa, NCBA, Credit Bank and Kenya Women Microfinance Bank (KWFT) which is the only microfinance bank.

KMRC was in September last year, issued with a license by Central Bank of Kenya, paving way for disbursement of funds by the World Bank, Continental Development Finance Institution (DFI) and African Development Bank (AfDB), to the tune of Sh35 billion in form of debt financing through the National Treasury.

It was established in April 2018 as a Public-Private Partnership (PPP), under the supervision of the Central Bank of Kenya (CBK), with a role of providing long-term funds to primary mortgage lenders.

They include Banks, Micro Finance Banks and Saccos which will help increase the availability and affordability of home loans to Kenyans which is part of the government’s Big Four Agendas of Affordable Housing Pillar.

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