The National Bank of Kenya (NBK) plans to build on its mortgage portfolio to meet demand from the diaspora. This is after reportedly sealing more than Sh1 billion worth of mortgage deals during an expo held in the USA last August.
According to the bank’s Executive Director for Retail and Business Banking Robert Kibaara, a lot of Kenyans abroad are continually looking for investment opportunities in residential homes and commercial buildings as well. Mr Kibaara described the event held in the state if New Jersey was an eye-opener.
“We are building a portfolio that will be able to meet the financial requirement of this growing market. We are aware that some of these investments especially those under commercial development may need large capital outlay which we’ll be able to meet,” he said speaking to Capital FM.
Local banks have been targeting the diaspora population with different products and more are likely to emulate NBK especially after the latest Central Bank of Kenya figures showed that remittances back home by March 2014 remittances had increased to Sh113.7 billion, up from Sh101.4 billion a similar period last year.
Locally, the lenders have been facing stiff competition from the Housing Finance of Kenya which has been dishing out as much as 105 per cent financing on mortgages in a big to consolidate its position as the biggest financier.
Rebased figures by the Kenya Bureau of Statistics showed that the real estate sector contributed greatly in pushing the country into the middle-income bracket. Despite the sustained boom in real estate, mortgage uptake has slowed, largely due to the high interest rates. Most commercial banks provide upto 80% of the mortgage value for as high as 15% variable interest, a factor that had greatly contribute to Kenyans shying away from the loans.
