By Kepha Muiruri For Citizen Digital
Kenya’s sole mortgage refinancing unit, the Kenya Mortgage Refinancing Company (KMRC) has received the regulator’s green light to raise Ksh.10.5 billion.
The Capital Markets Authority (CMA) has given the nod for the firm to issue the medium-term notes (MTNs) in various tranches beginning with Ksh.1.4 billion.
Proceeds from the MTN program are expected to diversify KMRC’s long-term funding mix which has until now relied on consensional loans from entities such as the World Bank and the African Development Bank (AfDB).
“This is an important milestone for KMRC as it aims to blend and diversify its sources of funds. Through this issuance, KMRC seeks to build its profile as a regular issuer of bonds in the Kenyan capital markets, as we work to raise more long-term capital, thereby re-financing more home loans and making them affordable and accessible for Kenyans,” said KMRC CEO Johnstone Oltetia.
Funds raised from the program will be disbursed to participating primary mortgage lenders (banks/Saccos) for onward lending to customers/home owners.
The participating primary lenders include KCB, Co-op, DTB, HF Group, NCBA, Stanbic and Credit banks.
Saccos under the program meanwhile cover the Kenya Police Sacco, Mwalimu National Sacco, Safaricom Sacco, Ukulima, Bingwa, Imarisha, Unaitas, Imarika, Tower, Stima and Harambee while the Kenya Women Finance Trust (KWFT) is the only participating micro-lender.
KMRC serves the primary role of providing long-term funds to financial providers as a means to cut the cost of mortgages to prop home ownership in the country.
Interlocked in the State’s affordable housing pillar, KMRC was established in April 2018 as a public-private partnership under the watch of the Central Bank of Kenya (CBK).
In addition to unlocking new capital, KMRC’s MTN plan is expected to bolster the corporate bond segment of Kenya’s capital markets by raising the number of listings on the tab.
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