KMRC Home Loans: Last month, the State announced that Kenyans who earn Sh. 150,000 and below per month would start getting home loans at a discounted annual rate of seven percent. Central Bank of Kenya (CBK) has now granted the Kenya Mortgage Refinance Company (KMRC) the permit to start lending. Loans from KMRC will now be capped at Sh. 4 million for Kenyans living in the Nairobi metropolitan area. Kenyans living outside this area will get a maximum of Sh. 3 million loan.
KMRC offers loans to banks and saccos for onward lending. It is backed by the government through the National Treasury. In this instance, banks and saccos will take the money from KMRC at a rate of five percent. They will then onward lend at a rate of seven per cent.
This will be low by close to five percent. The current rates in the market stand at rate of 11.95 percent. As of last month, KMRC had mobilized nearly Sh. 40 billion, including Sh. 2.2 billion in equity capital, Sh. 25 billion committed by the World Bank and Sh. 10 billion from African Development Bank.
While the KMRC home loans are bound to offer relief to aspiring home owners in the lower earning cadres, Kenyans who earn Sh. 150,000 and above will however continue to take mortgage loans at the current market mortgage rate in Kenya.