Kenyan banks and saccos took additional cheap loans worth Sh7.7 billion from Kenya Mortgage Refinance Company (KMRC) in the year ended December 2025 to expand their financing of mortgages.
KMRC had provided institutions including KCB Bank Kenya, Co-operative Bank of Kenya and Stima Sacco with cumulative loans of Sh19.6 billion in the review period, according to disclosures in the company’s latest annual report.
The loans, which are issued at an interest rate of 5 percent, had grown from Sh11.9 billion the year before as most institutions increased their borrowings for onward lending to mortgage clients at an interest rate of about 9.5 percent. A few institutions made partial repayments on their KMRC loans, cutting the amounts owed to the company.
KCB increased its KMRC loans the most by Sh2.6 billion to Sh4.5 billion in the review period, followed by Stanbic Bank Kenya whose borrowings rose by Sh1.5 billion to Sh5 billion. Qona Sacco’s balance jumped by Sh592.3 million to Sh807.4 million while that of Co-op Bank increased by Sh498.1 million to Sh806.2 million.
Unaitas’ borrowing from KMRC) jumped by Sh440 million to Sh976.5 million, with other institutions including Stima Sacco also tapping more loans to grow their mortgage portfolio.
A few lenders like Absa Bank Kenya and NCBA Bank Kenya reduced their KMRC-backed mortgage lending in a move that led to a reduction in balances owed.
The relatively cheaper pricing of the KMRC loans and what the primary mortgage lenders (PMLs) charge clients is aimed at boosting home ownership in the country. Standard mortgages have interest rates in the double-digits, with the average commercial bank lending rate standing at 14.81 percent in January 2026.
“Net loans and advances to PMLs increased by 65 percent from Sh11.9 billion to Sh19.6 billion during the year. This refinancing has benefited eighteen PMLs, six of which were onboarded during the year,” KMRC said.
“The total loans refinanced were 5,148 at the end of the year. The loan repayment tenor has been lengthening from 8.3 years (2021) to 12.3 years (2025) signaling enhanced affordability.”
KMRC noted that nearly 48 percent of KMRC-refinanced mortgages were issued to women, adding that this highlights significant progress in gender inclusion.
The mortgages backed by KMRC’s funding targets home buyers with a monthly income ranging from Sh50,000 to Sh200,000. The terms of the mortgages are mostly similar, with some differences in the interest rate which can range from 8.9 percent to 9.9 percent depending on the institution. Prospective home buyers can borrow up to Sh8 million for a loan term of up to 20 years.
KMRC says the cheaper financing has grown its market share in the country’s formal mortgage market.
“The company’s mortgage portfolio now accounts for about 5 percent of the banking sector’s mortgage book by value and 12.8 percent by number of loans,” KMRC said.
“Additionally, the share of refinancing through Saccos within KMRC’s portfolio grew from 7 percent in 2022 to 15.2 percent by December 2025, indicating a strengthened role for non-bank lenders in the affordable housing sector.”
Cheaper mortgages are seen as a means to grow home ownership among the middle class who were mostly locked out of the home lending market due to a mix of factors including high interest rates and shorter term credit facilities compared to KMRC’s.
