The Board of the African Development Bank has approved a EUR 90 million loan to support the establishment of the Kenya Mortgage Refinance Company (KMRC) to aid access to affordable mortgage loans by lower and middle income households.
The AfDB, which announced this in a statement, said the KMRC is a non-Bank financial institution designed to provide long-term funding and capital market access to local lenders, including commercial banks, and Savings and Credit Cooperative Organizations to help consolidate the East African nation’s growing domestic mortgage finance market.
The Kenyan government, through the central bank, is setting up the KMRC as part of initiatives to overhaul and stimulate the demand and supply balance in the housing and mortgage finance market, according to the statement.
It said the Bank’s intervention is in line with its flagship High 5s agenda; specifically the objective of Improving the Quality of Life for the People of Africa. The loan will result in multiplier effects on industries related to the housing sector and creation of jobs in these value chains.
The investment will complement Kenya’s ‘Big 4’ affordable housing national goal, and its plans to develop a self-sustaining affordable mortgage market. It will also promote inclusive finance through KMRC, whilst also assisting in creating new employment opportunities.
Through the Loan, the Bank adds on its initiatives to support affordable housing and development of mortgage finance institutions on the continent. As one of its priority objectives, the Bank supports investments that contribute to the widening and deepening of financial systems in Africa and enabling the private sector to mobilise and access long term domestic currency funding locally.