The Kenya Mortgage Refinancing Company (KMRC), a public-private partnership firm on Thursday disbursed 2.75 billion shillings (25 million U.S. dollars) to finance affordable housing.
Johnstone Oltetia, CEO, KMRC told journalists in Nairobi that the funds will be lent to primary mortgage lenders at concessional rates to help them create new mortgages in the market on long-term-tenor within single digits rates.
“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,” Oltetia said.
KMRC was this year issued with a license by the Central Bank of Kenya, paving way for the disbursement of funds by the World Bank and African Development Bank (AfDB) to the tune of 314 million dollars in form of debt financing through the National Treasury.
Oltetia said that the first disbursement to four financial institutions is drawn from the World Bank line of credit.
“The four institutions made successful applications and demonstrated a refinanceable mortgage portfolio of 1,400 mortgages, which acts as the collateral for the funding,” Oltetia noted.
According to KMRC, there are more participating institutions who are at an advanced stage of accessing its funding and are presently preparing their mortgage portfolio based on the set eligibility criteria.
Oltetia noted that KMRC will continue to innovate around fixed long-term financing to participating primary mortgage lenders to speed up growth in the uptake of home loans in Kenya.
He said KMRC is preparing to raise additional funds to support home loans through a bond issue in the third quarter of 2021.
“Noting that KMRC does not have a track record in the market, an agreement has been reached with African Development Bank to provide a partial credit guarantee and with further support from the World Bank group we expect this bond issue to be successful,” Oltetia revealed. Enditem