The Kenya Mortgage Refinance Company (KMRC), a Government-backed firm established to provide mortgage liquidity facilities to banks, microfinance institutions and SACCOs, has made its home loans attractive and affordable.
These steps include eliminating a requirement that anyone seeking a mortgage make an upfront payment of 10.0% of the property to be purchased before accessing the mortgage and another 5% to cover transaction costs such as legal and appraisal fees.
Now, to purchase a house worth KSh 8 million, a buyer will not need to make a 10% deposit of KSh 800,000 and KSh 400,000 to cover all incidental transaction costs, requiring that anyone seeking a mortgage must put in an upfront downpayment of KSh 1.2 million.
As an illustration, to buy a house of KSh 8 million, a buyer needed to come up with a 10% deposit of KSh. 800k plus another KSh 400k for transaction costs, hence an upfront cost totalling KSh 1.2 million. As of today, the buyer will no longer need to come up with the 1.2 million, as they will only need to demonstrate an ability to service a loan of KSh. 8.4 million.
KMRC was set up in a Public Private Partnership (PPP) arrangement between the Government of Kenya and the World Bank, with majority ownership held by the private sector at 75.0%.
Key shareholders of the state-backed mortgage firm are 23. They include GOK (25.3%), Development Finance Institutions-IFC, Shelter Afrique (22.9%), Commercial Bank-KCB, Co-op Bank, Stanbic Bank, NCBA, Credit Bank, DTB, Absa Kenya and HFC Limited (44.3%, Microfinance Bank-Kenya Women Microfinance Bank(KWFT) and SACCOs-Stima, Imarisha, Ukulima, Tower, Mwalimu, Unaitas, Harambee, Bingwa, Kenya Police, Safaricom and Imarika Sacco, all having a 7.5% stake.
According to KMRC CEO Johnstone Oletetia, the firm has disbursed Ksh8.1 billion to nine banks and 11 Saccos, with the banks accounting for 80% of the funds. The Sacco that has taken the largest amount of money is Ksh500 million, while for the banks is Ksh 3 billion.
KMRC provides competitive, low-interest, fixed, long-term finance to participating primary lenders at 5.0%, with a repayment period of up to 25 years. The state-backed KMRC provides loans to mortgage lenders, pegged at KSh 8 million in Nairobi, Kiambu, Machakos and Kajiado and KSh 6 million in other parts of the country.
 The facility is accessible to individual borrowers whose monthly salary is not more than KSh 150,000. The mortgage advances are refinanced through concessional funding by the World Bank and African Development Bank (AfDB).
 KMRC also provides bigger mortgages of more than KSh 8 million for developers handling massive housing projects-these; housing loans are also refinanced by the World Bank and AfDB.
 In 2022, KMRC floated its first medium-term note (MTN) on 4th March 2022 and raised KSh 1.4 billion, an oversubscription rate of 478.65%, with the second bond expected to be issued by June 2023. T
 The second tranche will be pegged at an interest rate of 12.5%, with NCBA as the placing agent and KCB Bank Kenya as the receiving Bank.
 Analysts attribute the high subscription rates of the first KMRC bond issuance to impressive high returns to investors of 12.5% and adequate financial backing from the World Bank and African Development Bank.
