KIGALI - Kenya Commercial Bank (KCB) Rwanda will further its mortgage portfolio with extra cash raised from the recent Right’s Issue by Its Nairobi-based parent company, KCB Group.
Maurice Toroitich, the Managing Director of KCB Rwanda recently told Business Times in an interview that the Bank had been allocated Rwf 3 billion from the Kshs 12.4 billion capital raised by KCB Group.
“We will be seeing part of this additional capital brought in to Rwanda to finance growth and expansion. We would like to assign some of that money to funding mortgages; we will grow strong in mortgages as we go into next year ; this will be one of our biggest products going into 2011,” Toroitich said.
While KCB Group plans to use the funds to support its regional expansion, Toroitich observed that the additional capital for Rwanda will be disbursed in different phases. “It is going to be business driven. It will be phased out depending on the demand,” he said.
Earlier last year KCB had announced that this would include mortgage financing on its investment portfolio but the plans were negatively affected by gaps in Rwanda’s mortgage law.
Prime mortgage lenders, mainly commercial banks, took a firm stand last year against the new mortgage bill that was recently amended, demanding for additional amendments to allow them to facilitate the development of the budding mortgage industry.
“The (amended) law is acceptable. It is only in the administrative part of registering a mortgage that we (bankers) think there is room for improvement. However, it is an evolving process that we believe will be sorted out in time,” he said.
He specifically referred to the process of registering a mortgage and acquiring a title deed, as these processes are not directly controlled by the bank.
“We have to work with the lands registry to make sure that the documentation process is fast, sufficient and foolproof. Currently it is possible to register a mortgage without a title deed. The question is what happens when the title deed is issued?”
However, Toroitich said he was optimistic with regard to government’s commitment to develop the industry; adding that such concerns will be resolved paving way for “good mortgage business.”