Kenyans earning less than 150,000 to get home loans at 7% interest

House-in-Runda-estate-in-Nairobi

The Kenya Mortgage Refinancing Company (KMRC) is set to start operations from September 2020, following a nod by the Central Bank of Kenya (CBK) – By Gerald Gekara.

The company will be offering refinancing or purchase services of eligible mortgage loans and investing in debt securities issued by the Government of Kenya.

KMRC will also lend money to local financial institutions at an annual interest rate of 5 percent, enabling them to issue home loans at 7 percent, a whopping 6 percentage lower than the 13 percent current market rate.

According to sources, KMRC has mobilized approximately Sh40 billion, including Sh2.2 billion in equity capital, Sh25 billion committed by the World Bank, Sh10 billion from African Development Bank, and plans to raise an extra Sh5 billion from the capital markets.

Analysts at Cytonn Investment, however, say that with the value of outstanding non-performing mortgages at Sh27.3 bn as at 2017, they are of the view that the Sh40 bn will be a one-off and thus the 7 percent interest rate will not be sustainable once the initial capital is exhausted.


KMRC was established two years ago to support the Affordable Housing Pillar of President Uhuru Kenyatta’s Agenda Four development blueprint, by providing secure, long term finance to Primary Mortgage Lenders (PMLs), who are then supposed to advance the same to individual borrowers. 

Among its big shareholders are; International Finance Corporation (IFC), which is the private sector arm of the World Bank and the Company for Habitat and Housing in Africa (Shelter Afrique), a pan-African housing and real estate development financier.

The other shareholders include the National Treasury and some 20 Primary Mortgage Lenders (PMLs); eight banks, one MFB (Micro Finance Bank) and 11 SACCOs (Savings and Credit Cooperatives).


The bank shareholders are KCB Group, Cooperative Bank, DTB, HF Group, NCBA, Absa Kenya, Stanbic, and Credit Bank. Kenya Women Microfinance Bank (KWFT) is the sole MFB (Micro Finance Bank) shareholder while SACCO shareholders include Kenya Police, Mwalimu National, Safaricom, Ukulima, Bingwa, Imarisha, Unaitas, Imarika, Tower, Stima and Harambee.

Access to mortgages in Kenya has remained relatively low mainly due to several reasons among the low-income levels that cannot service a mortgage.

Other reasons are soaring property prices, high-interest rates of up to 18 percent and high deposit requirements.