Kenya - Kenya Mortgage Refinance Company (KMRC)

The project consists of a sovereign loan to the Government of Kenya (GoK) of up to EUR 90 million to be on-lent to the Kenya Mortgage Refinance Company (KMRC) as a senior loan of up to EUR 72 million and a subordinated loan of up to EUR 18 million. The facility will complement the GoK’s efforts to develop a self-sustaining long-term mortgage market and stimulate private sector investment in the housing sector in collaboration with the private sector, the AfDB, and other International Financial Institutions (IFIs). KMRC will be a capital market-based solution, which will extend mortgage refinance products and enable capital market access as an intermediary to Primary Mortgage Lenders (PMLs), which are mainly banks, Savings and Credit Cooperative Societies (SACCOS) as well as Microfinance Institutions (MFIs), in order to help improve the accessibility and affordability of mortgages. This will increase the number of qualifying borrowers and help in standardizing mortgage lending practices to drive efficiency, leading to expansion of the primary mortgage market and home ownership while supporting the deepening of the local capital markets concurrently. The proposed support to the establishment of KMRC will catalyze further deepening of domestic capital markets, mobilization of local savings for the purposes of providing long-term local currency funding for the purposes of mortgage finance and housing development in Kenya.