JSMedia – A new financial institution, Kenya Mortgage Refinance Company (KMRC), has been approved to start operations on September 3 with an initial capital base of 35 billion shillings. The main goal of the firm is to boost supply of long-term mortgage facilities and push down market mortgage rates. According to the company, this will increase the number of mortgages from 26,000 today to more than 60,000 in 2022.
The KMRC will also launch a mortgage refinance firm in Nairobi, Kenya. The KMRC, which has eight commercial banks and one microfinance bank as shareholders, will offer loans to lenders to finance the process. The company is 80 percent private sector-owned, while the government owns 20 percent. The World Bank and the African Development Fund are supporting the program with Sh25 billion and $10 billion, respectively.
During a recession, the Kenya Mortgage Refinance Company has been a stabilizing force. The firm’s work has been supported by the World Bank and the African Development Bank. J-CAP’s work in Kenya and in other African cities has been funded by the governments of Japan, Norway and Luxembourg. The KMRC’s first loan to a sacco was approved on April 1. It will operate on a trial basis with no profit and no obligation.
Kenya Mortgage Refinance Firm to Offer Loans to Lenders
The KMRC will support the growth of the mortgage market in Kenya by targeting low- and lower-middle-income households. The new company’s target market is 95% of formally employed Kenyans. The new company will also provide competition for longer-term housing loans, making it easier for Kenyans to afford their homes and other household assets. There is no doubt that this will lead to increased homeownership and household assets.
The need for affordable housing in Sub-Saharan Africa has been limited by the lack of debt funding. People with low incomes cannot afford to pay for a mortgage due to high interest rates, high deposit requirements and unavailability of capital. The Kenya Mortgage Refinance Company will increase affordable housing in the country. Those who wish to own a home can do so with a low-interest mortgage at $50,000.
The KMRC has received a loan of $250 million from the World Bank and another $100 million from the African Development Bank. The KMRC plans to raise additional funds through the sale of a bond. The new organization will be responsible for offering loans to primary mortgage lenders. In other words, the KMRC will be a public-private partnership. The government hopes to promote the development of the new lending industry in the country by offering low-interest housing loans to homeowners.
The KMRC aims to improve the quality of Kenyan housing by offering loans to lenders. By providing affordable housing loans to lenders, it will reduce mortgage interest rates and lengthen repayment terms. The company also intends to provide long-term finance to PMLs and individuals. The KMRC is a key step toward ensuring that the mortgage market remains open for business. Once the KMRC has been up and running, the industry will have the funds to expand.
Despite its infancy, the initiative is a significant step forward for the Kenyan housing market. As of June, KMRC had awarded a record 10,000 construction contracts. The new mortgage refinance firm will help the banks reach the low-income areas of the country. Ultimately, it will improve competition and the quality of lending in Kenya. The new firm aims to offer loans to all mortgage lenders in the country.
The KMRC is a new public-private partnership that will offer loans to lenders and mortgage borrowers. It will aim to fund primary mortgage lenders by offering low-interest mortgages with long-term tenure. The KMRC will also aim to improve the quality of the mortgage market by reducing risk for the banks. These are a crucial part of Kenya’s housing sector. By increasing competition, this new lender is able to attract more loans from people who are seeking loans.