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The Mortgage Company,
The Greenhouse, 2nd Floor
Adams Arcade, Ngong Road
P.O. Box 29310-00100, Nairobi

Tel: +254 729 933955, +254 737 933955

An independent mortgage brokerage firm has entered Kenya’s mortgage market with a view to deepening property ownership and mortgage uptake in the country. The Mortgage Company (TMC Africa), the first mortgage broker in East Africa, hopes to revolutionise the home ownership value chain and hopes to rope-in informal income earners to take up mortgages. The firm will provide all-round services to potential mortgages – individuals and businesses – while shopping for the best financing options available in the market. By acting as an intermediary, the mortgage broker will be better placed to negotiate for tailored products with financiers for home purchase or construction loans.

Its position gives it an edge to keep tabs on developments in the real estate market and capacity to provided mortgage information. Traditionally, banks and other lenders sell their own products but presence of brokers is likely to see them introduce competitively priced mortgage packages.
“Our role as a mortgage brokerage is to complement financiers at all levels. We aim to simplify the experience of home ownership by negotiating with financiers on behalf of the client,” Caroline Kariuki, TMC Africa’s managing director, told The Star in an interview. “Our loyalty lies with the customer and we are committed to ensure they get the best and most straightforward deal when acquiring property,” said Kariuki, who is the immediate former divisional director of mortgages at KCB S&L Mortgages. She has over 18 years experience in the mortgage sector.

The mortgage broker will find direct lenders on behalf of clients for specific mortgage loans at a fee while saving the client money and time taken to close deals. It will work closely with credit reference bureaus in carrying out debt scoring to establish the credit risk of borrowers, while advising on appropriate mortgage product. It will negotiate with financiers and handle structuring of deals. “Usually, the draw-down time for most projects is about two years from the time a client begins negotiations with financiers but we can cut this to about three months,” said Kariuki. She said the firm will partner with lenders to develop new mortgage products that suit different kinds of customers in the market. “We aim to exploit the life-time value of the customer – from right out of college to retirement. We’ll be offering more than just mortgage options. We’ll assess customer needs and advice accordingly.

“As an independent player, I can see the existing gaps and the pains customers go through. For instance, we need products for informal incomes and for SMEs. Also, most people may not know that they can take up joint-ownership mortgages. At some point, we may need to have reverse mortgages, foreign-denominated loans and refinancing options for individuals and companies,” said Kariuki. Kariuki said in the next stage, the firm will venture into mezzanine financing by providing a hybrid of debt and equity financing to developers wishing to expand their property investments. Equity financing could see it partner with insurers and pension funds, with the potential of reaping lucrative returns of well over 35 per cent of investment value. TMC has been in the market for four months and has already handled transactions worth over Sh1 billion for about 10 corporate clients. It’s currently targeting developers, high net-worth individuals and groups. It charges one per cent the value of the mortgage for its services, which can be as little as Sh50,000 according to Kariuki.

The firm aims to enlist at least one million mortgage accounts in the next five years. Kenya’s mortgage market is still small with a mortgage debt of 2.5 per cent to the GDP, distributed in about 16,000 outstanding mortgage accounts in 2010. “We wish to see more people choosing to invest in property than rent, and this will not affect the rental market,” said Kariuki. TMC will pay closer attention to the retail market (individuals) and will be holding mortgage clinics every weekend to tap the numbers. “Unless you give someone a key to unlock their potential, then you are not serving the needs of the market – that’s where the rubber meets the road for us!” she said. In developed mortgage markets like the UK, Canada and the US, mortgage brokers are the largest sellers of mortgage products for lenders.

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