ADVOKS GLOBAL · KENYA
The Central Bank of Kenya (Mortgage Refinance Companies) Regulations, 2019
2. Interpretation
Edition: 2022-12-31 · In force
2. Interpretation
In these Regulations, unless the context otherwise requires—"Act" means the Central Bank of Kenya Act (Cap. 488);"assets and liabilities committee" means an assets and liabilities management committee of the board of a mortgage refinance company;"associate" means—(a)in relation to a company or other body corporate—(i)its holding company or its subsidiary;(ii)a subsidiary of its holding company;(iii)a holding company of its subsidiary;(iv)its non-operating holding company as its subsidiary;(v)a subsidiary of a non-operating holding company;(vi)a significant shareholder to that company; and(vii)any person who controls the company or body corporate whether alone or with his associates or with its associates;(b)in relation to an individual—(i)any member of his family:Provided that a person shall be deemed to be a member of a family if he is the parent, spouse, brother, sister, child, uncle, aunt, nephew, niece, stepfather, stepmother, stepchild and adopted child of the person concerned, and in case of an adopted child his adopter or adopters;(ii)any company or other body corporate controlled directly or indirectly by the individual whether alone or with his associates;"Bank" means the Central Bank of Kenya;"board" means the board of a mortgage refinance company;"capital" means paid-up share capital;"core capital" means permanent shareholders' equity in the form of issued and fully paid-up shares of common stock plus all disclosed reserves, less goodwill or any other intangible assets;"Cabinet Secretary" means the Cabinet Secretary responsible for matters relating to finance;"capital markets" means that part of the financial system concerned with raising funds for investment by dealing in shares, bonds, and other long-term investments;"chief executive officer" means the chief executive officer of a mortgage refinance company;"control" includes—(a)the ability to influence, whether directly or indirectly, the composition of the board of directors of a company or any other body corporate; or(b)holding, directly or indirectly, whether personally or through a holding company or subsidiaries thereof, or in any other way, an aggregate of twenty per centum or more of the voting power of a company or body corporate, whether alone, with associates or with other associates of the company or body corporate;"corporate governance" means the process and structure used to direct and manage the business and affairs of a company towards enhancing business prosperity and corporate accountability with the ultimate objective of realizing long-term shareholder value, whilst taking account of the interests of other stakeholders;"eligible mortgage" means a mortgage that meets the criteria under the eligibility standards as may be set by a mortgage refinance company and approved by the Central Bank;"leverage" means the use of debt to finance operations;"long term financing" means a loan with a maturity of more than one year;"mortgage" means a loan to purchase a residential house;"mortgage refinance company" means a non-deposit taking company established under the Companies Act (Cap. 486) and licensed by the Bank to conduct mortgage refinance business;"multi-lateral development banks" include—(a)the International Bank for Reconstruction and Development;(b)the Inter-American Development Bank;(c)the Asian Development Bank;(d)the African Development Bank;(e)the European Investment Bank; and(f)Other multi-lateral development banks in which G10 countries (Belgium, Netherlands, Canada, Sweden, France, Switzerland, Germany, United Kingdom, Italy, United States and Japan) are shareholding members;"primary mortgage lender" means an entity involved in mortgage finance including licensed banks, microfinance banks, Savings and Credit Co-operative Societies and any other entity that the Bank may by notice in the gazette declare;"qualified collateral" means a collateral that meets underwriting standards set out by the law and the mortgage refinance company, and approved by the Central Bank for the purpose of granting a loan to a primary mortgage lender;"significant shareholder" means a person, other than the government or a public entity who holds, directly or indirectly, or otherwise has a beneficial interest amounting to ten per cent or more of the share capital of a mortgage refinance company;"senior officer" means a person who manages or controls an entity, and includes—(a)the chief executive officer, deputy chief executive officer, chief operating officer, chief financial officer, secretary to the board of directors, treasurer, chief internal auditor, or manager;(b)a person with a similar level of position or responsibilities as a person described in paragraph (a);"subordinated debt" includes issued and paid-in unsecured subordinated debt instruments (debt equity, lines of credit, bonds, commercial paper or loan capital) having an original maturity of at least five years and—(a)principal should be repayable after at least five years;(b)during the last five years to maturity, a cumulative discount (amortization) factor of twenty per cent per annum will be applied to reflect the diminishing value of these instruments as a continuing source of strength;(c)the amount included for capital adequacy calculations is limited to fifty per cent of core capital;"supplementary capital" means subordinated debt, general provisions which are held against future and presently unidentified losses that are freely available to meet losses which subsequently materialize, and revaluation reserves on business premises which arise periodically from independent valuation of such premises, and any other form of capital as may be determined from time to time by the Central Bank; and"total capital" means the total sum of core capital and supplementary capital.