In order to meet rising client demand for mortgages, the lender used the funds throughout the nine months ending in September 2022. The CBK reduced the capital adequacy weighting for all residential mortgages from 50% to 35% last year, giving the bank fresh motivation to increase mortgage lending.
To supplement its mortgage lending portfolio, Absa Bank Kenya has borrowed Ksh. 3. 1 billion from the Kenya Mortgage Refinancing Company (KMRC). In order to meet rising client demand for mortgages, the lender used the funds throughout the nine months ending in September 2022.
As a founding member of the State- backed mortgage refinancing company, Absa had access to the pool of money for new house loans, but only after the company’ s first public offering.
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According to Absa Bank Kenya Interim Chief Financial Officer Moses Muthui, ” we see greater demand for mortgages with our mortgage book up north of 20 per cent and this is the perfect spot for growth as these loans are secured. ”
However, we are choosy because opportunities do not exist in all market segments. Both the high and low ends of the market present us with opportunities. Weakness in the middle is something we’ d like to avoid.
After the Central Bank of Kenya (CBK) reduced the capital adequacy weighting for all residential mortgages from 50% to 35% the previous year, the bank found fresh motivation to drive higher mortgages.
Beginning July 1, 2021, Absa’ s capital adequacy requirements will be lowered for home mortgages.
KMRC disbursed a total of Ksh. 1. 3 billion to seven lenders after processing loan applications from 12 major lenders in the previous year.
Kenya Mortgage Refinancing Company (KMRC) is Kenya’ s sole mortgage refinancer, with the government, Development Finance Institutions (DFIs), and Saccos owning the remaining shares.
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