I’ve been sitting by my window in Nairobi, watching the skyline shift, and I realized something: the cranes aren’t the only things moving. Money is moving, too—specifically into corporate bonds. If you’ve glanced at the NSE lately, you’ve likely seen two names flashing: Kenya Mortgage Refinance Company (KMRC) and I&M Bank.
It feels like a battle of ideologies. On one side, we have KMRC’s KES 3 billion Green Bond, a sustainability-labelled note aimed at putting people into climate-friendly homes at a crisp 12.20% interest rate. On the other, I&M Bank is flexing with a KES 10 billion Medium-Term Note at 12.20% interest as well.
The Return of the Specialist
KMRC is like that old friend who went quiet for four years and suddenly returned with a massive plan. Back in 2022, their debut was oversubscribed by a staggering 480%. Now, they’re back to refinance “green” mortgages. But here’s the kicker: While the KMRC bond was floated at a competitive 12.20%, the real “alpha” for investors lies in the anticipated tax relief. Because it is a “Green” and “Sustainability” labelled bond, KMRC is actively pursuing a tax-exempt status for the interest earned. If granted, this would significantly boost the effective yield compared to the I&M Note, which remains a standard taxable instrument. This makes the “Greenery” choice not just an ethical one, but a potentially superior fiscal strategy.
The Bank with the Plan
Then there’s I&M. While KMRC talks about “green” social home loans, I&M is talking about scale. They’ve launched a KES 20 billion program, starting with KES 10 billion to boost their “Tier II capital”, essentially, their financial muscle. With the Central Bank cutting rates by 425 basis points since late 2024, I&M’s 12.20% coupon looks very attractive compared to traditional savings.
The Intellectual’s Dilemma
Is it all sunshine and “sustainable” housing? Not quite. As a critic, I have to ask: for whom is this housing affordable? While KMRC has refinanced over 4,600 mortgages, the market still faces a deficit of 200,000 units annually. Meanwhile, I&M’s notes are subordinated and unsecured. In plain English? If the bank hits a rough patch, you’re standing in line behind the depositors.
Looking Ahead
We are witnessing a shift. We’re moving from simple borrowing to “Sustainability Finance Frameworks”. Whether or not you’re an investor looking for that 12.20% yield, the message is clear: Kenya’s capital market is no longer just for the giants. It’s for anyone looking to build the future.
