The National Treasury has proposed an allocation of Sh 13.9 billion for the Affordable Housing Programme. Of the proposed allocation, Sh 3.5 billion will go to the Kenya Mortgage Refinance Company for enhancement of the company’s capital as well as for on-lending to primary mortgage lenders.
Treasury Cabinet Secretary Ukur Yatan made the proposals during the 2021/2022 budget reading. Sh 8.2billion will be used for construction of Affordable Housing Units while Sh 500 million for construction of Social Housing Units. Kenya Mortgage Refinance Company is supporting the growth of residential housing market in Kenya by providing long-term funding to the mortgage lenders in order to increase affordability of mortgage loans to Kenyans.
Infrastructure bond
The Company is scheduled to issue an infrastructure bond by October 2021 to raise additional financing for its affordable housing finance objectives. It also plans to issue Green Bonds to finance climate friendly housing projects. As of December 2020, Kenya Mortgage Refinance Company had refinanced 1,400 affordable housing loans worth Sh 2.75 billion.
According to Yatani, government is also in the process of streamlining and simplifying the legal and regulatory process governing the housing sector and providing basic infrastructure services to developers. To support the Nairobi Metropolitan Services in reversing urban indignity in Nairobi City County, Sh 100.0 million has been set aside for the Nairobi Metropolitan Services Improvement Project and Sh 111.2 million for construction of foot bridges. Other key allocations to the Housing, Urban Development and Public Works sector includes Sh 3.5 billion for the Kenya Informal Settlement Improvement.
