Having a strategy that will enable the affordable house development project to be a success is considered vital as it will play a role in spurring mortgage uptake which is on the low levels in the country.
This is mainly attributed to increasing default cases, slow uptake of new units and lenders shying away from long term commitments in the market segment that is compounded by the high cost of houses.
The high cost of credit is also blamed on for the low uptake of mortgages in Kenya.
The move by the government to set up the Kenya Mortgage Refinancing Company was purposely to aid in addressing financial obstacles as it would act as the financial intermediary between the capital markets and financial institutions.
The Central Bank of Kenya (Mortgage Refinance Companies) Regulations, 2019 draft states: “The Finance Act, 2018 amended the Central Bank of Kenya Act (CBK Act) to provide the legal framework for the licensing and regulation of the mortgage refinance business and to bring the operations of Mortgage Refinance Companies within the regulatory and supervisory purview of the Central Bank of Kenya.”
The regulations are quite necessary as they will help in the provision of a clear framework for licensing, liquidity management, capital adequacy, corporate governance, risk management, and reporting requirements of MRCs.
However, many Kenyans know less about the various affordable and suitable housing products available in the market despite CBK inviting members of the public to make their comments about the draft.
There are about 20,000 mortgage accounts in Kenya, with the affordable housing agenda expected to provide the much-needed impetus.
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