The Kenya Mortgage Refinance Company (KMRC) lent 474.9 million shillings to mortgage financier HF for onward lending to homebuyers, according to information in the latter’s 2021 annual report.
HF is among the financial institutions to announce that they have received funding from KMRC, which was established to catalyze the growth of home ownership in the country.
HF took out the loan from KMRC at an interest rate of 5.15% per annum. The credit facility is due to mature on December 23, 2028. Other institutions that have taken loans from KMRC, which is owned by the National Treasury and private companies, include Co-op Bank, which has drawn 549.8 million shillings last year.
KMRC lends the money to banks, saccos and microfinance companies at an interest rate of 5% per annum, enabling them to on-lend the same at single digit rates to mortgage customers earning less than 150,000 shillings per year. month.
Altogether, there were a total of 26,971 outstanding mortgages in Kenya in 2020, worth 232.7 billion shillings. The average size of home loans was 8.6 million shillings, with an average loan rate of 10.9% and a term to maturity of 11 years.
This relatively high rate and the mismatch between banks’ short-term deposits and the long-term commitment of mortgage finance have been blamed for the low underwriting and disbursement of housing loans.
KMRC was therefore formed to supply banks with long-term financing at 5% interest, which in turn allows them to commit to financing home buyers at more favorable rates and longer terms. .
The mortgage refinancer had by the end of last year accessed 6.5 billion shillings in capital for subsequent loans.