The Kenya Mortgage Refinance Company Plc (KMRC) became the first mortgage refinance company in Kenya officially on Thursday after securing its license from The Central Bank of Kenya (CBK).
The license was granted pursuant to the CBK Mortgage Refinance Companies Regulations, 2019 after KMRC’s fulfillment of the stipulated licensing requirements.
KMRC was incorporated on April 19, 2018 under the Companies Act, 2015 as a Public Limited Company.
KMRC’s principal objective is to provide long term finance to primary mortgage lenders including commercial banks, mortgage finance companies, microfinance banks, and Savings and Credit Co-operatives to increase the availability and affordability of mortgage loans to the public.
Making mortgage affordable for larger sectors of the population supports the Affordable Housing Pillar of the Big 4 Agenda, President Uhuru Kenyatta’s legacy plan.
KMRC’s role will be to source loans from big investors and multilateral lenders and act as a pool from which mortgage lenders in the country can draw from at affordable rates.
The initial loans to kick-start KMRC were provided by the World Bank (Ksh25 billion) and the African Development Bank (Ksh10 billion).
The Government expects that KMRC will contribute to more home ownership through cheaper mortgages.
“We expect the refinance company to significantly contribute to the development of the housing finance market in Kenya and help reverse the low mortgage penetration, by increasing the number of mortgages from the current 26,000 to over 60,000 by the year 2022,” President Kenyatta said during the launch of the company in May 2019.
During the launch, it was also revealed that the affordable housing loans refinancing will be capped at Ksh4 million and Ksh3 million in Nairobi and the rest of the country respectively. Refinancing for market housing loans will be issued at market rates.