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One of the requirements for a mortgage in Kenya is a monthly salary above KSh100,00. However, only 3 per cent of formal sector employees in Kenya earned more than KSh100,000 in 2017 according to data from the Kenya National Bureau Statistics. Therefore most Kenyans are locked out of the mortgage market due to low-income levels.
The Government on 22nd May launched the Kenya Mortgages Refinancing Company. The company intends to lower the cost of mortgages and increase their availability by providing long term funding to primary mortgage lenders in the country. Kenyans who earn less than KSh150,000 monthly income will qualify for affordable housing loans funded by the institution.
World Bank has already approved a KSh25 billion loan towards the project. Additionally, the African Development Bank has authorized KSh10 billion funding in support of the program.
KMRC is 80 per cent privately owned, and 20 per cent government-owned. Shareholders of the company include 8 Kenyan banks namely; KCB Group, Co-op Bank, Barclays, NIC, Stanbic, DTB, HF group, and Credit Bank; a microfinance institution, and 11 Saccos. The mortgage refinancing company will be supervised and regulated by the Central Bank of Kenya. Its seven-member board will assist in formulating policies and strategies that will guide the company.
Related; Govt’s Affordable Housing Project Overview & Framework
