| 1 |
Funding /risk transfer / both |
KMRC’s refinancing operations is funded through two sources: a credit line from two development finance institutions (i.e. World Bank, and the African Development Bank), and through proceeds from domestic bond issuance. The two sources of funding are blended. The credit risk of the refinanced home loans is borne by the primary mortgage lenders (PMLs) with the funding addressing the asset-liability mismatch. KMRC refinances on a clean book basis and in the event a refinanced loan becomes defective, the PMLs is required to replace the defective loan with a performing loan.
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| 2 |
Eligible assets |
Owner occupier home loans of up to Kes. 10.5 million (equivalent to USD 81,395. 1 USD = Kes. 129)
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| 3 |
Brief description of structure for each |
KMRC’s refinancing to primary mortgage lenders (PMLs) is on a small margin basis and the refinancing is on eligible portfolios originated to meet the KMRC’s criteria.
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| 4 |
Fees / pricing structure |
Pricing is line with credit policy as approved by the Board of Directors.
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| 5 |
Servicing |
The refinancing to primary lenders is amortized and serviced monthly.
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| 6 |
Risk sharing (if appropriate) |
KMRC’s recourse is to the borrowing banks in case of default. KMRC has separately established a risk sharing facility to partially derisk primary lenders on the portfolios they generate from the low income and inform sector segments of the population.
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| 7 |
Other Comments |
N/A
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