Stanbic Bank joins group lending house purchase funds under KMRC
Stanbic Bank Kenya has joined the stable of lenders rolling out home loans backed by the Kenya Mortgage Refinance Company (KMRC), signing deals with three developers to fund mortgages for home buyers.
The lender said it is partnering with Superior Homes Kenya, Avic International Real Estate and Safaricom Staff Pension Scheme Registered Trustees under the scheme, where it will price mortgages at rates up to 9.5 % with a term of up to 25 years.
In addition, the bank will offer mortgage financing of up to 105% loan in local and foreign currencies, allowing its customers to access vacant land and construction financing.
“Our three additions to our partner portfolio further strengthen our ability to offer our customers a wide range of properties to choose from on their journey to make their dream of owning a home a reality,” said Anjali Harkoo, Head of Solutions Stanbic Bank customers.
KMRC, a joint venture between the Treasury and private lenders, was set up to reduce the risk of housing loans for workers earning up to 150,000 shillings per month under former President Uhuru Kenyatta’s plan to build 500 000 houses in five years until 2022.
The company provides funds to mortgage financiers for subsequent loans at 5% annual interest, enabling them to deploy home loans at single-digit interest rates.
By May this year, KMRC had disbursed a total of 3.87 billion shillings to mortgage lenders and aimed to issue another 5.2 billion shillings by the end of the year.
Over the years, Kenya’s mortgage market has suffered from high and variable interest rates, partly due to the high cost of funds for lenders and the short-term nature of deposits discouraging the deployment of new loans. .
The average size of mortgage loans last year rose to 9.2 million shillings, from 8.6 million shillings in 2020, according to data from the Central Bank of Kenya, excluding low-to-middle income workers. a market of 26,723 loan accounts worth 245.1 billion shillings.
Economic survey data shows affordable housing built by the State Department for Housing fell from 338 units in 2020 to 431 units last year.
The new units of affordable homes that were built last year now bring to 2,613 units put in place by the state since 2017. However, there were 3,480 low-cost homes under construction by the state as of December 2021 for 6.9 billion shillings.