The World Bank Implementation Status & Results Report Kenya Affordable Housing Finance Project (P165034) Kenya Affordable Housing Finance Project (P165034) AFRICA EAST | Kenya | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2019 | Seq No: 5 | ARCHIVED on 18-Aug-2021 | ISR47853 | Implementing Agencies: Kenya Mortgage Refinance Company, Kenya National Treasury and Planning, Republic of Kenya, Kenya Ministry of Lands and Physical Planning Key Dates Key Project Dates Bank Approval Date: 30-Apr-2019 Effectiveness Date: 02-Jun-2020 Planned Mid Term Review Date: 28-Apr-2022 Actual Mid-Term Review Date: Original Closing Date: 30-Jun-2024 Revised Closing Date: 30-Jun-2024 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The development objective is to expand access to affordable housing finance to targeted beneficiaries Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Support to the Kenya Mortgage Refinance Company:(Cost $252.00 M) Technical Assistance:(Cost $10.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions KMRC is now operating with full staff and strong management. All the SACCOs* have received a license from the Sacco Societies Regulatory Authority (SASRA) to issue mortgage loans that can be refinanced by KMRC. All the primary mortgage lenders (PMLs) have been trained on environmental and social -E&S- risk management to undertake the mortgage business. KMRC is unique in the world as it includes the SACCOs in its ownership, which reflects an inclusive approach to reach households with modest incomes. The next big step for KMRC is to issue a bond by the end of 2021, to ensure sustainability in its funding source. The bond preparation are underway. It will be also important for KMRC to continue building the pipeline of affordable mortgage loans that can be refinanced. 8/18/2021 Page 1 of 6 The World Bank Implementation Status & Results Report Kenya Affordable Housing Finance Project (P165034) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Substantial Substantial Macroeconomic Substantial High High Sector Strategies and Policies Substantial Substantial Substantial Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Substantial Moderate Moderate Sustainability Fiduciary Substantial Moderate Moderate Environment and Social Moderate Moderate Moderate Stakeholders Moderate Moderate Moderate Other -- Moderate Moderate Overall Substantial Moderate Moderate Results PDO Indicators by Objectives / Outcomes Support to the Kenya Mortgage Refinance Company IN01027344 ►Volume of bonds issued by KMRC (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 150,000,000.00 Date 20-Feb-2019 15-Feb-2021 15-Feb-2021 20-Feb-2024 Volume of bonds issued by KMRC (amount in local currency translated in US$). The correct indicator Comments: would be 15 billion KES. IN01027345 ►Number of affordable mortgage / housing loans refinanced by KMRC (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1,393.00 293.00 30,000.00 Date 02-Jan-2019 15-Feb-2021 06-Aug-2021 21-Feb-2024 This indicator monitors the number of affordable housing/mortgage loans refinanced by KMRC (i.e. of an Comments: amount below KES 3 million, or KES 4 million in Nairobi Metropolitan). Further disaggregated data will be collected as needed. 8/18/2021 Page 2 of 6 The World Bank Implementation Status & Results Report Kenya Affordable Housing Finance Project (P165034) Intermediate Results Indicators by Components Support to the Kenya Mortgage Refinance Company IN01027346 ►Percentage mortgage / housing loans refinanced by KMRC extended to women (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 46.00 44.00 40.00 Date 20-Feb-2019 15-Feb-2021 06-Aug-2021 30-Apr-2024 Proportion of housing/mortgage loans submitted as collateral to KMRC that are extended to women or Comments: joint ownership IN01027348 ►Average maturity of new mortgage loans refinanced by KMRC in the year (Years, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 10.00 Date 20-Feb-2019 15-Feb-2021 15-Feb-2021 30-Apr-2024 This indicator tracks the average maturity of new mortgage loans submitted to KMRC as collateral in a Comments: specific year. It is an indicator of flow, not stock. It will provide an indication of how successful KMRC is in lengthening mortgage loan tenors. IN01027349 ►Percentage of Project beneficiaries who feel project activities reflected their needs (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 80.00 Date 22-Feb-2019 15-Feb-2021 15-Feb-2021 30-Apr-2024 Percentage of project beneficiaries surveyed by KMRC and primary mortgage lenders who feels that Comments: project's activities reflected their needs IN01027350 ►Volume of mortgage lending (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2,230,000,000.00 2,175,502,000.00 2,190,000,000.00 3,160,000,000.00 Date 31-Dec-2017 31-Dec-2019 31-Dec-2020 30-Apr-2024 Volume of mortgage lending in the Kenyan market. End target assumes a growth of 6% every year, above inflation but moderate due to the interest rate cap. In 2017, growth was 1.5 percent (2017 was the year when the cap was in force for a full year). Comments: the actual amount is the KES amount from the CBK report translated at the USD rate as of December 2020. 8/18/2021 Page 3 of 6 The World Bank Implementation Status & Results Report Kenya Affordable Housing Finance Project (P165034) IN01027351 ►Percentage of Non-Performing Loans in the residential mortgage sector (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 12.20 13.00 12.00 6.00 Date 31-Dec-2017 31-Dec-2019 31-Dec-2020 30-Apr-2024 Comments: NPLs to gross mortgage loans in the residential mortgage sector (overall sector) IN01027352 ►Volume of affordable housing and mortgage loans refinanced by KMRC (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 25,000,000.00 5,000,000.00 225,000,000.00 Date 02-Jan-2019 15-Feb-2021 15-Feb-2021 22-Feb-2024 Volume of affordable housing and mortgage loans in KES translated in USD, cumulative. Indicator in KES in final year would be KES 23 billion. this is the actual amount, a greater amount has been verified but the Comments: security is still being perfected. Technical Assistance IN01027347 ►Four strategies/studies/roadmaps completed and adopted by MLPP (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 4.00 Date 20-Feb-2019 15-Feb-2021 15-Feb-2021 23-Feb-2024 Four studies and advice designed to improve the quality of the foundations of the MLPP's computerization of property registration are completed and adopted by MLPP. Indicative timeframe: Year 1: Land Comments: Information Management System (LIMS) and Roadmap. Year 2: Land sector strategic assessment. Year 3: Business Process mapping. Year 4: Public information and sensitization program on land laws. Performance-Based Conditions IN01027353 ►PBC 1 The Project Implementing Entity is legally established, has the required regulatory capital and approvals to start operations (Amount(USD), Process, 10,000,000.00, 100.00%) Baseline Actual (Previous) Actual (Current) February 2022 Value 0.00 10,000,000.00 10,000,000.00 -- Date -- 15-Feb-2021 15-Feb-2021 -- Comments: The capital was paid in January 2019. The approval for KMRC to start operating is still pending. 8/18/2021 Page 4 of 6 The World Bank Implementation Status & Results Report Kenya Affordable Housing Finance Project (P165034) IN01027354 ►PBC 2 The Borrower has provided Tier 2 Capital to the Project Implementing Entity (Amount(USD), Output, 10,000,000.00, 100.00%) Baseline Actual (Previous) Actual (Current) February 2022 Value 0.00 10,000,000.00 10,000,000.00 -- Date -- 15-Feb-2021 15-Feb-2021 -- IN01027355 ►PBC 3 The Borrower has provided additional Tier 2 Capital to the Project Implementing Entity (Amount(USD), Outcome, 30,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) February 2022 Value 0.00 0.00 0.00 -- Date -- 15-Feb-2021 15-Feb-2021 -- Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P165034 IBRD-89580 Effective USD 250.00 250.00 0.00 48.95 202.51 19% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P165034 IBRD-89580 Effective 30-Apr-2019 05-Dec-2019 02-Jun-2020 30-Jun-2024 30-Jun-2024 Cumulative Disbursements 8/18/2021 Page 5 of 6 The World Bank Implementation Status & Results Report Kenya Affordable Housing Finance Project (P165034) PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 8/18/2021 Page 6 of 6