An estate in Nairobi. Kenya is targeting to increase the uptake of mortgages. FILE PHOTO | NATION
Kenya is targeting to increase the uptake of mortgages with the
formation of a refinancing company that will help increase liquidity in
the market.
The Kenya Homes Refinance Company (KHRC) is
expected to issue bonds in the local capital markets, and with the
proceeds extend long-term loans to financial institutions secured
against mortgage by providing refinancing facilities.
The government hopes to provide 500,000 affordable homes to Kenyans by 2022.
“KHRC
is expected to operate as a private sector-driven company with a public
purpose of developing the primary and secondary mortgage markets by
raising long term funds from capital markets,” said Treasury Cabinet
Secretary Henry Rotich.
The mortgage market in Kenya has contracted in volumes to 24,085 in 2016 from 24,458 in 2015 according to the Central Bank.
Less
than 10 per cent of all housing credit comes in the form of mortgages
from the banking sector, with the bulk coming from savings and credit
societies and housing co-operatives.
The formation of the company is seen as a major step in driving growth of mortgage uptake.
However Cytonn Investments managing director Edwin Dande said project execution is key.
“The
idea of a refinancing company to push the growth of the mortgage market
is good but its success will depend on execution,” he said.
In East Africa, only Tanzania has a mortgage refinancing company, established in 2010.
By
the end of 2016, Tanzania Mortgage Refinance Company’s mortgage
refinancing and prefinancing to banks stood at $26.4 million up from
$19.4 million in 2015.
In Africa, Nigeria and Morocco
are among countries that have adopted the refinancing model to drive
growth of the mortgage market.
No comments :
Post a Comment