The Co-operative Bank of Kenya (Co-op Bank) took a loan of kes 549.8 million from the Kenya Mortgage Refinance Company (KMRC) last year for onward lending to home buyers, disclosures by the lender’s majority shareholder show.
Co-op Holdings, the majority shareholder of the listed lender, said the bank inked the agreement with KMRC in June last year but did not state the maximum amount that would be available to the bank under the deal.
“In June 2021, the Co-operative Bank entered into an agreement with the KMRC for a credit facility at a fixed rate of five per cent to finance affordable housing mortgage loans. As of the end of 2021, the amount disbursed to the bank was kes 549.79 million.” Co-op Holdings in its 2021 financial report.
KMRC said it is lending the money to the bank at an interest rate of five per cent per annum, which will allow the institution to on-lend the same at single-digit rates to mortgage customers earning less than kes 150,000 per month.
Co-op Holdings, which is owned by co-operative societies and unions, holds a 64.5 per cent stake in Co-operative Bank.
The lender accounted for five per cent of Kenya’s total outstanding mortgage loans as of the end of 2020, the latest Central Bank of Kenya (CBK) data shows. This amounted to 1,285 mortgage accounts, with loans worth kes 11.9 billion.
Co-op Bank’s subsidiary Kingdom Bank had also issued mortgages worth kes 1.19 billion at the end of the period, from 203 accounts.
