First tranche is valued at Kes1.4 billion, fixed interest rate set at 12.5 percent per year
Nairobi, February 4, 2022 – The Kenya Mortgage Refinance Company (KMRC) has today launched its first Medium-Term Note (MTN) programme, which it seeks to raise Kes10.5 billion in the next four years.
Cash raised from the MTN programme – whose first tranche is the Kes1.4 billion worth of bonds put on sale today – will be disbursed to participating Primary Mortgage Lenders (PMLs), for onward lending to home loan borrowers at a lower rate, as the home loans re-financier seeks to make home ownership affordable for Kenyans.
The notes, which are available to investors with a minimum of Kes100,000 and subsequent multiples of Kes100,000, will be on sale to investors during a two-week window from today (February 4) to February 18, 2022. The interest on the MTN – which has been set at 12.5 percent – is payable two times per year. The 12.5 percent rate is backed by KMRC’s recently acquired rating of AA-(KE) / A1+ (KE) (LT/ST) from GCR, the rating agency.
“This is an important strategic landmark for us, as our mission to blend and diversify our inventory of long-term funds kicks off. This MTN programme allows us to scale up our operations, thereby impacting more households through our work of re-financing home loans and making them affordable and within reach for Kenyans, said KMRC CEO Johnstone Oltetia.”
The issuance marks KMRC’s first foray into the local capital market as it seeks to raise sustainable long-term capital, in its quest to reduce mortgage interest rates, make housing affordable and improve the viability of home loans as a pathway to home ownership for more Kenyans. Hitherto and since it received its operating license from the Central Bank of Kenya (CBK) in September 2020, KMRC has relied exclusively on concessional loans from the World Bank and the African Development Bank (AfDB), the continental development finance institution (DFI), for long-term capital.
Since receipt of its license, KMRC has accessed Kes6.5 billion cumulatively from the credit lines (World Bank and AfDB) through the National Treasury. With these funds, KMRC has so far been able to refinance qualifying home loans from participating PMLs with rates on the refinanced loans below 10 percent, materially lower than previous average rates of 12 percent.
The KMRC model works by resolving the asset maturity mismatch that has been blamed for high interest rates on home loans in Kenya. The company mobilizes long-term funds, which it then on-lends to participating lenders, which include commercial banks, savings and credit cooperatives (SACCOs) and microfinance institutions (MFIs). The lenders are then able to match the maturities of the long-term credit available to them from KMRC with the home loans they offer to borrowers, resulting in lower interest rates, hence driving affordability.
The participating PMLs, which are also KMRC shareholders include KCB, Co-operative, DTB, HF Group, NCBA, Absa, Stanbic and Credit Banks. The SACCO PMLs are Kenya Police, Mwalimu National, Safaricom, Ukulima, Bingwa, Imarisha, Unaitas, Imarika, Tower, Stima and Harambee. The sole MFI is Kenya Women Finance Trust (KWFT).

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