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