State-backed Kenya Mortgage Refinance Company (KMRC) has reported an 84.4 percent jump in net profit for the six months to June 2024, on higher earnings from lending activities during the period.
It posted a net profit of Sh669 million in the period under review, up from Sh362.7 million a year earlier.
The company provides long-term fixed-rate loans on concessional terms to primary mortgage lenders such as banks and saccos, which then on-lend the funds to home buyers on favourable terms.
To support the increased lending, KMRC increased its own borrowings by seven percent to Sh22.94 billion, with the company's cash and cash equivalents also rising to Sh14.37 billion from Sh11.62 billion a year earlier.
Part of the borrowings were raised through a corporate bond issued in February 2022, which raised Sh1.4 billion at an annual interest rate of 12.5 percent.
This was the first tranche of a Sh10.5 billion Medium Term Note (MTN) programme, with KMRC planning to issue the second tranche when market conditions improve in terms of interest rates.
Prior to the bond sale, KMRC had relied on concessionary loans from the World Bank and the African Development Bank (AfDB) for long-term capital.
At the end of June, KMRC also held Sh1.8 billion in equity from a mix of shareholders including the National Treasury (25 percent), local commercial banks (44 percent) and saccos (7.9 percent).
The International Finance Corporation (IFC) has an 11.8 percent stake in KMRC, while Shelter Afrique Development Bank holds 11.1 percent. The Kenya Women Microfinance Bank (KWFT) holds 0.6 percent.
The eight commercial banks that have a stake in KMRC are KCB Bank Kenya, Co-operative Bank, DTB, Absa Bank Kenya, Stanbic Bank Kenya, NCBA, HFC Limited and Credit Bank. The Saccos include Kenya Police, Mwalimu, Safaricom, Apstar, Bingwa, Imarisha, Unaitas, Imarika, Tower, Stima and Harambee.
