Kenyan banks and savings and credit cooperative societies (saccos) have accessed Sh7.7 billion in additional funding from the Kenya Mortgage Refinance Company to expand mortgage lending and improve access to home ownership.
Funding to drive affordable housing
The new funding forms part of a broader financing push by KMRC, which has provided a cumulative Sh19.6 billion to participating lenders as of the end of 2025.
The facility offers loans to financial institutions at a relatively low interest rate of about 5 percent, enabling them to extend mortgages to customers at around 9.5 percent—significantly lower than typical market rates.
Rising uptake among lenders
Major lenders increased their borrowing from KMRC to grow their mortgage portfolios. Some of the biggest beneficiaries include commercial banks and saccos that have ramped up lending to meet rising demand for home financing.
For instance, leading banks significantly expanded their loan uptake, while several saccos also increased borrowing to strengthen their presence in the mortgage market.
However, a few institutions reduced their exposure through partial repayments, reflecting varying strategies across the sector.
Boosting home ownership
The KMRC refinancing model is designed to make mortgages more accessible, especially for middle-income earners who have traditionally struggled with high interest rates and short repayment periods.
Eligible borrowers can access home loans of up to Sh8 million, with repayment tenors stretching up to 20 years, improving affordability and long-term planning.
The initiative primarily targets individuals earning between Sh50,000 and Sh200,000 monthly, a segment often underserved by traditional mortgage products.
Growing impact on housing market
KMRC noted that its mortgage portfolio now accounts for about 5 percent of the banking sector’s total mortgage value and 12.8 percent by loan numbers, highlighting its growing influence in Kenya’s housing finance sector.
Additionally, the share of loans channelled through saccos has increased significantly, signalling a stronger role for non-bank lenders in expanding access to housing finance.
Encouraging inclusion
Nearly half of the mortgages supported through KMRC financing have been issued to women, reflecting progress in improving gender inclusion within the housing market.
The longer repayment periods—now averaging over 12 years—also indicate improved affordability compared to earlier years.
Outlook
The continued expansion of KMRC-backed financing is expected to drive further growth in Kenya’s mortgage market, particularly by lowering borrowing costs and increasing access to long-term housing loans.
Analysts say the model could play a key role in addressing housing deficits by making home ownership more attainable for a larger segment of the population.
