KMRC is a non-deposit taking financial institution under the supervision of the Central Bank of Kenya. The company was incorporated on 19th April 2018 with the single purpose of providing long-term funds to Primary Mortgage Lenders (Banks and Saccos) in order to increase the availability and affordability of mortgage loans to Kenyans. KMRC is one of the key institutions under the Affordable Housing Pillar of the Big 4 Agenda.
KMRC was established as Public-Private-Partnership with majority ownership by the private sector at 75% and the Government at 25%. Its current shareholders include: the National Treasury and Planning, Shelter Afrique, eight (8) commercial banks, eleven (11) Deposit Taking Savings and Credit Co-operatives (Saccos) and one (1) Microfinance Bank.
KMRC is not a parastatal/state corporation or housing fund. KMRC is structured as a private sector driven financial institution.
As a non-deposit taking financial institution, KMRC is primarily funded through Debt and Equity. KMRC equity capital is invested to generate income to run the institution. In order to refinance portfolio of residential mortgages. KMRC has mobilized long term funding from International Development Finance Institutions through the National Treasury. In the medium term and to ensure sustainability, KMRC will issue bonds in the capital markets to raise funds to refinance mortgages.
- KMRC provides liquidity to participating financial institutions, which in turn increases their scope of lending to customers.
- To improve liquidity management by gaining ability to cover unexpected short-term deposit outflow, thereby avoiding potentially costly short-term borrowing or asset liquidation.
- KMRC promotes standardized lending practises across market players due to set eligibility criteria for refinance, which in turn drive market efficiency thus help develop the secondary mortgage market.
- To reinforce lower overall transaction cost by pooling issuance as compared to PMLs accessing the markets individually. KMRC is regular issuer of long-term, high quality investments needed by institutions with long term liabilities such as pension funds, social security funds and insurance companies.
Both KMRC and NHDF are institutions that were established to complement and support the government’s Affordable Housing Pillar under the Big 4 Agenda Development plan. KMRC supports this Agenda on the demand side by extending long-term funds to Primary Mortgage Lenders to enable them avail affordable housing loans to wananchi. NHDF on the other hand was established to support the Affordable Housing Agenda on the supply side by providing offtake arrangements through Tenant Purchase Scheme (TPS) and offtake guarantees to the developers.
No, KMRC re-finances residential home loans generated from properties built under the Government Affordable Housing Programme, private developers as well as from other players in the housing sector.
KMRC offers two categories of bulk loans to PMLs:
I) Affordable Home Loans
- World Bank Credit Line – Loan size upto KES. 4M and monthly income threshold of KES. 150,000 and below.
- AfDB Credit Line – Loan size upto KES. 8M with no monthly income limit.
II) Market Home Loans: these loans will be extended to Primary Mortgage Lenders to finance home loans above the affordable home loans threshold; these have no income limit
KMRC offers funding for owner occupied titled residential properties.
Origination and servicing of the loan remains with the Primary Mortgage Lender. If a loan pledged to KMRC becomes non-performing, the PML replaces it with a performing loan.
Borrowers will access KMRC funds from the participating Primary Mortgage Lenders.
- Borrowers are able to access longer term home loans leading to lower monthly repayments thus improved disposable cashflow.
- Borrowers will benefit competitively priced loan offering in the market due to the increase in the number of institutions offering home loan solutions.
- Increased competition amongst housing loan providers will lead to innovatively designed mortgage products, thus wider choice for customers.
KMRC provides long term financing (upto 20years) at a concessional rate of 5%.
Interest rates and repayment period details are determined at the underwriting stage.
Yes. KMRC supports private developers on the housing demand side by ensuring that there is uptake through refinancing home loans. KMRC also links private developers with participating banks and SACCOs to promote visibility of the affordable housing finance project.