The tough op­er­at­ing cir­cum­stances have led to an in­crease in NPLS, which has af­fected busi­ness per­for­mance.”

The East African - - BUSINESS -

Sam Waweru, man­ag­ing di­rec­tor, HF Group

Last year, 75.5 per cent of lend­ing to the mort­gage mar­ket was ac­counted for by six in­sti­tu­tions: One medium sized bank at 20.9 per cent and five banks from the large banks peer group con­tribut­ing 55.6 per cent.

How­ever, the value of non-per­form­ing mort­gages in­creased to $273 mil­lion in De­cem­ber 2017 from $220 mil­lion in De­cem­ber 2016. No­tably, the num­ber of fi­nan­cial in­sti­tu­tions of­fer­ing mort­gages to cus­tomers fell to 31 from 35 af­ter two banks quit the busi­ness while two oth­ers were bought out.

To ad­dress the fi­nanc­ing ob­sta­cles, to up­take of mort­gages, Kenya has set up the Kenya Mort­gage Re­fi­nanc­ing Com­pany to act as a fi­nan­cial in­ter­me­di­ary be­tween the cap­i­tal mar­kets and fi­nan­cial in­sti­tu­tions, par­tic­u­larly com­mer­cial banks that of­fer mort­gage loans by pro­vid­ing them with liq­uid­ity.

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