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KCB signs up for mortgage refinancing firm

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KCB Bank Kenya has formally signed up for the Kenya Mortgage Refinance Company (KMRC), a non-deposit taking entity meant to drive affordable mortgages in Kenya.

KMRC, a private public investment, majority owned by the private sector (80%) and the balance (20%) held by the government was launched on Wednesday by President Uhuru Kenyatta in Nairobi.

KCB is one of the main shareholders of the company whose main role is to provide long term funding to primary mortgage lenders (banks, MFIs and Saccos) to increase availability and affordability of mortgage loans. Currently, the private shareholders are eight commercial banks, 11 deposit taking Saccos and one microfinance institution.

KCB Group Chief Operating Officer Samuel Makome will sit as a member of the KMRC board which was unveiled at the event that was also attended by the Group CEO and MD Joshua Oigara.

The KMRC initiative sits well within KCB focus of driving the growth of the housing sector in Kenya. As a market leader, KCB has been keen to get into partnerships with both private and public sectors in an effort to further grow the housing industry that is at the center of Kenya’s economic transformation.

KMRC is expected to improve asset liability risk management, thus helping financial institutions scale up housing finance and extend repayment periods. It will refinance residential mortgage loans generated from properties build under the Government Affordable Housing programme as well as from other players in the housing sector. KMRC will not participate in the retail market by directly providing financing to individual borrowers, a preserve of the primary mortgage lenders.

The firm will offer bulk loans to primary lenders such as KCB who will provide affordable mortgages capped at Ksh 4 million within Nairobi metropolitan area and Ksh 3 million elsewhere.

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The loans are to be extended to borrowers with a monthly income of not more than Ksh 150,000. This is expected to bring in more mortgage providers into the market, effectively lowering the cost of loans.

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BT Correspondent
BT Correspondenthttp://www.businesstoday.co.ke
editor [at] businesstoday.co.ke
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