Kenyans to Get House Loans at Low Interest From September

Kevin Namunwa | Aug 11, 2020

Newly established Treasury-backed lender, Kenya Mortgage Refinance Company (KMRC) is set to start rolling out cash to banks and Sacco which will in turn lend the money to Kenyans who want to own houses.

Affordable Housing is one of President Uhuru’s Big four agenda and the establishment of KMRC was aimed at helping Kenyans realize affordable housing. Kenyan earning lower than Ksh 150,000 monthly salary are expected to start getting the house loans soon.

The house loans will be dispersed next month at an annual subsidized interest of 7% which is nearly half the prevailing market rates.

KMRC will lend money to financial institutions at an annual interest of 5%, enabling them to write home loans at 7%.

The Chief Executive of the Treasury-backed lender, Johnstone Oltetia, said the refinancing firm expects to start lending before the end of the third quarter, which closes on September 30.

The KMRC boss further said that the firm’s operation permit from the Central Bank of Kenya (CBK) will be ready this month. KMRC is ready to start lending after the regulator completes vetting its staff.

“The CBK has approved the KMRC to operate as a mortgage refinancing institution in principle but the only thing that remains is to have a license,” said Mr Oltetia.

The government owns a 25 percent stake in KMRC, with the rest of the shares held by banks, SACCOs, and microfinance institutions. Its board of directors has been in place since July last year.

KMRC has so far mobilized nearly Ksh40 billion, including Ksh2.2 billion in equity capital, Ksh25 billion committed by the World Bank, and Ksh10 billion from African Development Bank.

The plan to have KMRC finance the lenders will enable Kenyans to get their house loans as banks have gone slow on providing home loans due to a spike in defaults

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