The Finance Committee of Parliament has tasked Housing Finance Bank to offer thorough justification for a Shs61bn capitalization request from government.
The government, with 49.18 percent shares, owns the bank jointly with National Social Security Fund -NSSF (50 percent) and the National Housing and Construction Company (0.82 percent).
State Minister for Finance David Bahati on Wednesday told the committee that the money is required to meet new capital requirements by the Central Bank which asked commercial banks to raise their share capital. Housing Finance Bank’s capital base currently stands at 61 billion Shillings and needs to be doubled to 122 billion Shillings.
Bahati says the government needs to provide 30 billion Shillings to enable the Bank to meet the new capital requirements. The additional 31 billion Shillings will be covered by NSSF. He is optimistic that the new share capital will be leveraged to grow the loans and advances from the 383 billion Shillings as at December 2016 to the projected 800 billion Shillings over the next five years.
Bahati further informed the committee that in consultation with the Ministry of Lands, Housing Finance Bank agreed to come up with a mortgage product suitable for civil servants who will be based on salary levels and for a period of 20 years.