Co-op Bank Sets Aside 200 Million Shillings to Boost Big 4 Affordable Housing

The Co-operative Bank of Kenya has set aside a total of 200 million shillings toward the funding of President Uhuru’s Big Four affordable housing agenda.

The money will be injected in the share capital of the Kenya Mortgage Refinance Company (KMRC) – the mortgage refinancing entity spearheading the project’s mobilization of affordable financing.

The body is an initiative of the World Bank and the National Treasury focused on the provision of secure, long-standing financial solutions to mortgage lenders. The goal is to increase the availability of these loans to Kenyans.

The bank is a step ahead towards partnering with the national government in the implementation of the housing project, which is a game changer as it tremendously boosts the agenda.

In a statement, the bank said that whereas the Ministry of Finance has already commenced the KMRC’s initiative to source for a lasting financial solution to ensure that many Kenyans get affordable housing, Co-op bank eyes a pivotal role in this fundamental agenda.

Co-op bank is the first institution from the financial sector to make a major contribution where the government will remain as the largest shareholder of 20 percent.

The Ministry of Finance is set to make the first contribution of 1.5 billion shillings and then welcome other investment bodies to facilitate efficient capitalization.

The targeted investors include the private sector and other financial institutions playing a key role in the real estate sector. The project is expected to tempt banks, microfinance institutions, and SACCOS.

Co-op bank noted the gap in the agenda since the mortgage industry is crippling with a mere 25 000 loans whilst Kenya could really do with a ton of housing units.

KMRC is better placed at boosting the finances for the affordable housing agenda because typical mortgages suffer the uncertainty of whether it is suited in financing the project. After all, the uptake is still negligible years after their introduction into the market.