CMA Gives nod to HF’s 10Billion Medium Term Note

Program aimed at bolstering growth of business in mortgage and property financing

 Nairobi August 30, 2010…The Capital Markets Authority (CMA) has approved the issue and listing of a Kshs 10 Billion Medium Term Note by Housing Finance. In a letter signed by the Authority’s Chief Executive Officer, Ms. Stella Kilonzo, the Regulator states its satisfaction with Housing Finance’s application and full disclosure of material information in accordance with the requirements of the Capital Markets Act. The good news follows an earlier nod from the Central Bank of Kenya which indicated no objection to the issuance of the medium note.  



The approval means that Kenya’s premiere mortgage financier can now embark on a Medium-term note (“MTN”) program that enables the company to offer debt securities on a regular and/or continuous basis.



According to HF’s Managing Director, Mr. Frank Ireri, the medium term note program is part of the plan to source long term funding to bolster its growth of business in form of mortgages and property financing.  “The approval and consequent listing will provide the requisite financial gearing to enable Housing Finance play an integral role in helping boost the available supply of units with a number of major projects already in the pipeline” He said. “In addition, he said, ‘we shall be playing an indirect role in the supply of these additional units by financing project developers sponsoring the initiatives”. He added. Contrary to earlier reports, the funds raised will not go towards the institutions’ capital but will form part of debt funding.

The approval by the regulator is seen as a boost to Kenya’s market leader in the mortgage financing industry as it seeks to benefit from the growing demand for housing in urban and rural areas. The current demand is estimated at 150,000 units per annum with supply estimated at 35,000 units. With such a massive supply gap, the private sector is expected to play a critical role in meeting the shortage. Equally, there exists a huge funding gap as demonstrated by statistics from the Central Bank that show that lending by commercial banks and mortgage finance institutions to the sector as at the end of 2009 was KES 9.2bn while the private sector approvals to put up properties by the City Council in  the year 2009 was valued at KES 77.0bn

The company has already named Standard Chartered Bank Limited and NIC Capital Limited as the joint lead arrangers for the program.

According to analysts and several stockbrokers, the positive growth of Housing Finance’s top line and bottom-line,  strategy, scope for revenue generation due to housing demands and a healthy appetite for fixed income security by investors provide an excellent recipe for the success of Housing Finance’s funding solution  which is in tandem with its business model.

The Mortgage financier’s model seeks not only to provide mortgages that enable more Kenyans to own homes, but also play a leading role in enabling a steady supply of quality and affordable property and homes in the sector

CMA Gives nod to HF’s 10Billion Medium Term Note



Nairobi August 30, 2010…The Capital Markets Authority (CMA) has approved the issue and listing of a Kshs 10 Billion Medium Term Note by Housing Finance. In a letter signed by the Authority’s Chief Executive Officer, Ms. Stella Kilonzo, the Regulator states its satisfaction with Housing Finance’s application and full disclosure of material information in accordance with the requirements of the Capital Markets Act. The good news follows an earlier nod from the Central Bank of Kenya which indicated no objection to the issuance of the medium note.  



The approval means that Kenya’s premiere mortgage financier can now embark on a Medium-term note (“MTN”) program that enables the company to offer debt securities on a regular and/or continuous basis.

According to HF’s Managing Director, Mr. Frank Ireri, the medium term note program is part of the plan to source long term funding to bolster its growth of business in form of mortgages and property financing.  “The approval and consequent listing will provide the requisite financial gearing to enable Housing Finance play an integral role in helping boost the available supply of units with a number of major projects already in the pipeline” He said. “In addition, he said, ‘we shall be playing an indirect role in the supply of these additional units by financing project developers sponsoring the initiatives”. He added. Contrary to earlier reports, the funds raised will not go towards the institutions’ capital but will form part of debt funding.

Adequate housing continues to be affected mainly by inadequate planning and serviced land.  The cost of land  remains high and is made complex by inadequate legislative framework.

The approval by the regulator is seen as a boost to Kenya’s market leader in the mortgage financing industry as it seeks to benefit from the growing demand for housing in urban and rural areas. The current demand is estimated at 150,000 units per annum with supply estimated at 35,000 units. With such a massive supply gap, the private sector is expected to play a critical role in meeting the shortage. Equally, there exists a huge funding gap as demonstrated by statistics from the Central Bank that show that lending by commercial banks and mortgage finance institutions to the sector as at the end of 2009 was KES 9.2bn while the private sector approvals to put up properties by the City Council in  the year 2009 was valued at KES 77.0bn





When is the best time to start planning for a mortgage?

The journey to property ownerships begins with putting funds aside as savings to achieve your long term goal of home ownership. This can be achieved by opening a 1st HOP Account, a Crossover Savings Account or through purchase of a Housing Development Bond. It is advisable to begin saving early for home purchase since mortgage is a long term commitment that requires self-discipline.


The 1st Hop account is an excellent starting point for young people who want to develop the savings discipline. It enables you to save up to Sh.4,000 per month tax free. Also, interest on the account for amounts below Sh.3,000,000 does not attract tax. The account’s key advantage is that it builds deposits and its benefits accrue when you invest in a housing project.

The Crossover Savings Account offers you very attractive features that enable you to save for long term projects such as home ownership or any other dreams you have. These features include: earning high interest on the account deposits as well as loyalty points on every deposit, access to 100 per cent mortgage financing, up to 25 per cent discount on commitment fees, up to 2 per cent discount on mortgage interest when applying for a mortgage loan and much more.

The Housing Development Bond (HDB) on the other hand equally suits those who want to set aside money for putting up a home. The HDB requires a minimum of Sh.50,000 and offers a saving of 5 per cent on withholding tax. HDB gives you the flexibility of savings and withdrawal in case there is an urgent need for the money.

As your income grows, it is wise to put more money aside. The challenge with most of us is the culture of first spending then saving what remains.