Mortgage firm gets Sh603m from National Treasury to expand housing

Cabinet Secretary of Treasury John Mbadi at the 4th KMRC in Kisumu. [Courtesy] The Kenya Mortgage Guarantee Trust will get some Sh603.1 million to boost housing finance for underserved and informal sector workers. Cabinet Secretary for Treasury John Mbadi last week said the move complements KMRC's milestone of securing $300M in concessional funding from the World Bank and AfDB with Treasury support. Speaking in Kisumu during the 4th Kenya Affordable Housing Conference, Mbadi said the funds are on-lent to KMRC and strategically blend with proceeds from domestic bond issuances to offer refinanced mortgages at single-digit interest rates, a breakthrough for thousands of aspiring homeowners. Mbadi emphasised that sustainable housing finance must evolve beyond traditional budgetary allocations to embrace innovation and catalytic financial instruments. "We must leverage tools like mortgage-backed securities (MBS), bonds, and blended finance to mobilize long-term capital, deepen market liquidity, and enhance inclusivity in housing," he said. One such innovation is the capitalisation of the Kenya Mortgage Guarantee Trust, which Mbadi described as a risk-sharing facility aimed at de-risking lending to informal and irregular income earners. "By providing partial risk cover, KMGT will empower lenders to extend credit to those typically excluded from formal finance, such as informal sector workers and small business owners," he noted. The CS reaffirmed the National Treasury's dedication to enhancing policy frameworks, including tax reforms and capital market incentives, to attract private sector participation in housing development. Mbadi detailed additional fiscal commitments by the National Treasury, including a Sh120.2 billion allocation in the 2025/26 financial year budget for housing and settlement. He further highlighted provisions in the Finance Act 2025, such as an annual tax relief of Sh360,000 for incremental home construction loans designed to reflect how most Kenyans build their homes progressively. Mbadi acknowledged Kenya's rapid urbanisation rate of 4.3 per cent per year and cited the latest Kenya Housing Survey, which showed only 2 per cent of households hold mortgages, with the majority renting in informal settlements. This, he said, underscores the urgency for targeted interventions in affordable housing finance. "Our journey to inclusive and sustainable housing must be anchored on bold vision, innovative financing, and targeted guarantees that bridge gaps in traditional lending," he declared. He pledged to mobilise more concessional funding for KMRC from development partners to scale refinancing capacity and expand access to home loans. His remarks werer echoed by KMRC Chief Executive Officer Johnstone Oltetia, who celebrated the Treasury's support and reiterated the value of blended finance in housing delivery. "By combining concessional loans with capital raised through bonds, we've enabled financial institutions to lend at affordable rates. This model is already proving successful in transforming access to housing," he said. He also expressed appreciation for the presence and leadership of CS Mbadi, and commended the participation of international guests from Tanzania, Uganda, India, Pakistan, and Malaysia, which he said reflects growing global interest in scalable, sustainable housing solutions.

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Mortgage firm gets Sh603m from National Treasury to expand housing

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