Kenya’s biggest mortgage lender plans to double its home-loan business over the next two years by offering longer repayment periods, its chief executive officer said.
KCB Group Ltd., which has 70 billion shillings ($685 million) in home loans and is also the country’s biggest bank by assets, wants to have 20,000 mortgages on its books by the end of 2020, CEO Joshua Oigara said in an interview in the capital, Nairobi.
“What we should be looking at are individuals who want long-term loans of 15 to 20 years,” he said.
The government of East Africa’s biggest economy is expected to have set up Kenya Mortgage Refinance Co., which will provide funding to lenders and enable banks to refinance current home loans, by this month, Oigara said. The country will provide 1.5 billion shillings into the agency in exchange for 20 percent stake, while commercial banks, credit unions and development agencies will take up the rest.
President Uhuru Kenyatta’s administration has made low-income housing one of its four top priorities after winning a second term last year, by offering tax relief and stamp-duty exemptions for first-time buyers.
“We are working very closely with the central bank on a number of action plans,” Oigara said. “What we’d really like to see as an industry is the strengthening of the Financial Reporting Centre,” he said, referring to the state institution that assists in identifying the proceeds of crime and combating money laundering.
The lender was among five of the country’s biggest banks fined in September for handling money acquired illegally from the National Youth Service. It has paid a 149.5 million-shilling penalty and is sealing gaps identified by the central bank after a probe, Oigara said.
