Kenya’s Mortgage Refinance Co. & African Development Bank bond guarantee
Kenya’s Mortgage Refinance Company reaches a deal that will see the African Development Bank guarantee its debut bond issue.
Kenya Mortgage Refinance Company (KMRC) is a firm formed in partnership with government’s Treasury parastatal and private lenders. The firm lends mobilized funds to commercial banks and financial institutions who in turn give home loans to homebuyers seeking affordable housing units.
These loans are issued at single-digit interest rate – and are payable in 20 years.
The KMRC raises funds towards helping low-middle income earners have n easier access to low interest-rate affordable home loans.
As of October 2020, KMRC has a credit line of more than KShs. 35 billion.
On an Interview with Kenya’s Business Daily Africa, the KMRC CEO Johnson Oltetia shared this…
“We will issue the bond when we are still drawing down the credit line from the World Bank and African Development Bank, but a new institution like KMRC doesn’t have a track record and that means you face a bit of challenge raising funds,”
“We have worked out an arrangement with AfDB for a credit enhancement, and that means KMRC will be replaced by an AAA-rated institution like AfDB’s balance sheet to support that (bond issue).”
Both the World Bank and African Development Bank have provided the Kenya Mortgage Refiance Company with concessional loans of KShs. 25 Billion and KShs. 10 Billion respectively.
Other financial institutions including commercial banks, saccos; bought shares that provided additional funding for the affordable housing programme.
Read Full Article on Business Daily Africa (external link)