The Kenya Mortgage Refinance Company (KMRC), a treasury-backed lender, which provides banks and Saccos with liquidity for subsequent loans to households, will begin providing loans at the end of this month.
The institution’s chief executive, Johnstone Oltetia, has confirmed that shareholders will advance at 5% to allow them to advance to their clients at rates higher but below 12% of current market mortgage rates.
“From the start, we have put in place finance to meet market demands to provide loans to partners and clients to enable them to acquire affordable housing at cheap rates. We will announce the first loan by the end of September, ”Oltetia said.
The lender he confirmed has so far recruited 20 major mortgage lenders (PML), Cooperative Bank, DTB, HF Group, NCBA, Absa Kenya, Stanbic and Credit Bank, International Finance Corporation (IFC) and Housing in Africa ( Shelter Afrique).
Kenya Women Microfinance Bank (KWFT) is the sole shareholder of MFB (Micro Finance Bank), while SACCO shareholders include Kenya Police, Mwalimu National, Safaricom, Ukulima, Bingwa, Imarisha, Unaitas, Imarika, Tower, Stima and Harambee.
Speaking at the launch of Ukulima Sacco’s new mortgage products at a Nairobi hotel, Oltetia said his institution is committed to working together to reduce the huge housing supply gap and thereby enable Kenyans to become homeowners.
UKulima Sacco Chairman Philip Cherono said the developed mortgage product was recently approved by the Sacco Societies Authority (SASRA).
“SACCOs continue to play an important role in the construction of housing and in raising funds for the purchase of land to build housing in addition to raising capital for housing development. As you know, Kenya’s SACCO sector is the largest in Africa and is ranked seventh in the world according to the SASRA 2019 financial report. This puts us in a better position to lend to Kenyans at interest rates. affordable interest, almost half of the current market. rate, ”he said.
He added, “Potential buyers will be eligible for mortgages of up to 8 million shillings with a repayment period of up to 20 years. We are very happy today that Ukulima Sacco is a part of this great and noble initiative and the partnership with KMRC supports our mission to strengthen member empowerment through the provision of quality financial services, by providing long-term funding. term and reducing our dependence in the short term. term loans. The funding is expected to bring the number of mortgage accounts to around 2,000 in the first year and to 4,000 by 2022, ”Cherono said.
Sacco CEO Richard Nyaanga said the newly launched mortgage product is a game-changer and will help quench the thirst of the majority of Kenyans who are in desperate need of home ownership.
“We are well aware of the current social and economic difficulties, especially in our industry, and this means that we need to come up with more creative and aggressive business ideas,” Nyaanga said.
According to the state housing department, there is already a backlog of two million housing units and the accumulation is increasing by 150,000 units each year due to several factors, including the limited availability of mortgage finance and financing. development.
Sacco has also initiated cardless transactions with PESALINK through the family bank and instant printing of ATM cards through the cooperative bank.
KMRC, confirmed Oltetia, has so far mobilized nearly 40 billion shillings, including 2.2 billion shillings in equity, 25 billion shillings committed by the World Bank and 10 billion shillings from the African Development Bank. (ADB).
“In addition, we plan to raise an additional 5 billion shillings through the issuance of a green bond in the capital markets next year, as well as exploring other local and international sources. Adequate funding will allow us to increase mortgage accounts in the country by 130.7%, from the current 26,504 mortgage accounts to 60,000 loan accounts by 2022, ”he added.
According to data from the Central Bank of Kenya (CBK), commercial banks in Kenya had only 26,504 mortgage accounts on their books worth 224.8 billion shillings at the end of 2018.