KMRC's Partial Guarantee Scheme to Expand Access to Housing

KMRC's Partial Guarantee Scheme to Expand Access to Housing

The Kenya Mortgage Refinance Company (KMRC) is implementing a partial guarantee scheme by year-end to mitigate the risks associated with lending to high-risk borrowers. This initiative aims to boost lender confidence and expand access to housing for low-income earners.

KMRC CEO Johnstone Oltetia explained that the scheme will provide a partial guarantee for mortgages extended to high-risk individuals. He also highlighted plans to introduce additional primary mortgage lenders and new products, such as green mortgages, Shariah-compliant mortgages, and developer financing.

A mortgage guarantee ensures that if a borrower defaults, the guarantor (KMRC) will compensate the lender for any losses resulting from property foreclosure, up to a specified amount. This provides lenders with a safety net against the potential risks of high-risk borrowers.

This intervention is expected to encourage lenders to increase mortgage lending to high-risk individuals and communities. By mitigating the risks of default, the scheme aims to make homeownership more accessible for a wider segment of the population.