Kenya Mortgage Refinance Company (KMRC) plans to issue a housing bond before the end of this year as part of its strategy to offer cheaper finance to prospective homebuyers. With help from the International Finance Corporation (IFC), the mortgage refinance firm intends to mobilize funds for lending to low-income households.
Kenya launched the mortgage refinance company (KMRC) in 2018 with the help of the International Finance Corporation and private and state investors. The launch followed the government’s plan to provide affordable housing to millions of Kenyans with no access to mortgages.
KMRC received a $250 million loan from the World Bank and a $100 million loan from the African Development Bank (AfDB) shortly after its launch. The company aims to raise additional funds through the sale of the bond later this year.
“Our focus is on affordable housing, which has been defined as housing for people whose income is less 150,000 shillings per month (about US$ 1,400). People in that income range have never been able to afford a mortgage in Kenya,” said Johnstone Oltetia, Chief Executive Officer of KMRC.
According to housing experts, Sub-Saharan Africa suffers a housing shortage due to the high cost of land and the importation of most of the construction material. Banks only lend to low-risk projects with guaranteed returns. The Kenya Mortgage Refinance Company may be the solution to Kenya’s housing shortage.
KMRC seeks to raise $350 million to provide affordable mortgages to nearly 10,000 households at the price of $50,000 or less per housing unit.
Also read: Kenya launches mortgage refinance company
