The Kenya Mortgage Refinance Company (KMRC) has listed a KSh3 billion sustainability bond on the Nairobi Securities Exchange, after attracting applications worth KSh9.38 billion, reflecting an oversubscription rate of 312.8 per cent.

The bond's listing is one of the latest sign of deepening institutional appetite for targeted development debt in East Africa’s largest capital market.

Today's transaction marks the second tranche under KMRC’s approved KSh10.5 billion Medium-Term Note Programme, following an inaugural KSh1.4 billion issuance in 2022 which drew applications of Sh8.5 billion.

Proceeds from the sustainability bond will be blended with KMRC’s existing concessional funds and deployed to refinance two categories of home loans: green affordable housing, supporting climate-resilient and environmentally sustainable construction; and social home loans aimed at improving access for women and low-income households.

Johnstone Oltetia, KMRC’s chief executive described the issuance as a “strategic landmark”, adding that the investor response demonstrated confidence in the company’s direction. 

“Today’s listing affirms the role of capital markets in making homeownership more accessible, affordable, and sustainable,” Oltetia explained. “The investor response demonstrates confidence in KMRC’s mandate of promoting affordable home ownership while deepening Kenya’s debt capital markets.”

Liquidity and affordability

Since its establishment, KMRC has sought to address structural constraints of liquidity and affordability that have historically limited mortgage market depth in Kenya. 

To date, the company has refinanced over KSh30 billion in home loans, supporting over 5,800 homeowners across 39 counties. Nearly half of refinanced loans have benefited women, the company said.

By providing long-term liquidity to primary mortgage lenders, KMRC enables fixed-rate, single-digit home loans with extended repayment periods, reducing monthly repayment burdens for qualifying borrowers.

This strategy is critical in Kenya's home loan market where high interest rates and short loan tenors have long suppressed mortgage penetration.

Haron Sirima, KMRC board chairman, said the listing demonstrated the power of capital market instruments in financing development outcomes. 

“This listing reflects growing confidence in KMRC’s mandate, governance, and long-term contribution to Kenya’s housing sector,” Sirima said. “It demonstrates that affordable housing can be supported through market-based instruments that deliver financial returns alongside measurable social and environmental impact.”

The transaction, whose lead arranger was NCBA, drew backing from the government with Treasury CS John Mbadi calling the listing a national milestone. “It signals a decisive shift in how we mobilise capital to finance development priorities, particularly housing,” Mbadi said. “It also affirms that Kenya’s capital markets are deepening, diversifying, and maturing in line with our long‑term economic aspirations.”

NCBA Group Managing Director John Gachora said the listing reflected the strength of long‑standing partnerships and execution expertise in complex capital market transactions. 

“As lead arranger, NCBA is proud to have supported KMRC in structuring and bringing this transaction to market, mobilising long‑term funding for Kenya’s affordable housing sector,” the director said. “Our integrated corporate and investment banking and investment bank teams bring strong technical expertise and market insight, reinforcing our role as a trusted advisor in delivering impactful, sustainable financing solutions.”

KMRC's green bond oversubscription mirrors a pattern seen in other Kenyan green and social bond issuances in recent years, where domestic pension funds, banks, and development finance institutions have increasingly sought dual financial and impact returns. 

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