NAIROBI, May 22 (Xinhua) -- Kenyan President Uhuru Kenyatta on Wednesday launched the Kenya Mortgage Refinance Company (KMRC), a financial institution whose sole function is to provide long-term loans to primary mortgage lenders.
KMRC, which starts operations with an initial capital base of 35 billion shillings (about 350 million U.S. dollars), is expected to address inherent financing challenges and unlock liquidity for affordable housing.
Kenyatta said KMRC will provide long-term loans to mortgage lenders in order to increase the availability and affordability of mortgage facilities in the country.
"The intervention is based on recognition that reaching the goal of adequate, safe and affordable housing for all, especially the lower income group, requires a fundamental rethinking of the traditional approach used in the past," Kenyatta said during the launch in Nairobi.
He said the uptake of housing mortgages in Kenya remains below its potential with the Central Bank of Kenya statistics showing that the total outstanding mortgage debt in 2017 stood at about 2.23 billion dollars. This, Kenyatta said, represents only about 2.74 percent of Kenya's GDP, which shows that the housing mortgage business in Kenya is still very small.
"We expect the refinance company to significantly contribute to the development of the housing finance market in Kenya and help reverse the low mortgage penetration, by increasing the number of mortgages from the current 26,000 to over 60,000 by the year 2022," he said.