The Kenyan Association of Building Societies, representing the mutuals responsible for the majority of the country's housing finance, has called on the government to pass legislation to create a mortgage-backed securities market.

Kenya's interest rates of over 20% mean that mortgage finance is prohibitively expensive for all but the richest, and the association hopes that using securitized mortgages to borrow directly from the capital markets will allow building societies to access and pass on cheaper finance.

African efforts to use securitization to increase access for lower and middle income borrowers are being pioneered in South Africa by Gateway Homeloans, a Fannie Mae-like institution that recently begun to buy eligible home loans originated by the country's mortgage lenders. It plans to issue a securitization in a year to 18 months. - MD

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