It is good news for Kenyans who earn below Kshs. 150,000 per month. Kenya Mortgage Refinance Company (KMRC) has come to their rescue. The treasury-backed lender will offer banks and Saccos loans at an interest rate of five percent per annum for on lending to their customers. Any Kenya who wishes to purchase houses under this partnership will be eligible to receive a loan of up to Kshs. 4million that is to be repaid in twenty years.
The funding from KMRC is expected to increase the number of mortgage accounts up to 60,000 by 2022. According to data from the Central Bank of Kenya, commercial banks had 26,000 mortgage accounts in their loan books, worth Kshs. 224.8billion towards the end of 2018.
Default rate on mortgages escalated to 41 percent (Kshs.38billion) in 2018 and consequently, many customers have lost their property through public auctions.