2021-06-08

Banking Circular No. 2 of 2021 - Amendment of Risk Weight on Mortgage Loans

The Central Bank of Kenya (CBK) has decided to reduce the risk weight for mortgage loans from the current 50% to 35%. This amendment is in line with international best practices and will be effective from July 1, 2021. The move is aimed at creating an enabling environment for banks to increase their mortgage lending and support the Kenyan government's effort of providing decent and affordable housing in Kenya. Banks are advised to adhere to the new requirements regarding capital adequacy computation in FORM A: CBK/PR3, where the risk weight for Mortgage Loans secured by residential property will be amended from 50% to 35%.

Kenya

Central Bank of Kenya

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