The country’s financial regulators led by the Central Bank of Kenya (CBK) have warned on the liquidity risks facing fund managers and pension schemes with an exposure to real estate.
This could lead to such investment managers being unable to pay matured returns or member benefits owing to a property slump in recent years now worsened by the Covid-19 pandemic.
“The pension schemes and fund managers who have invested in buildings and land face liquidity risks, occasioning delays in settling member benefits,” said the Financial Stability Report (FSR) 2020.
Produced annually, the FSR assesses the weakness and strength of Kenya’s financial system and reviews the period from January 2019 to June 2020.
Contributing to the FSR include other sector regulators such as the Retirement Benefits Authority (RBA), the Capital Markets Authority (CMA), the Insurance Regulatory Authority (IRA), and Sacco Societies Regulatory Authority (SASRA).
Data from the National Treasury, Ministry of Trade, Industry and the Kenya Deposit Insurance Corporation (KDIC) is also included.
The FSR noted that during the period under review, the occupancy rate of property declined, impacting the selling and rent prices.
Source: standardmedia.co.ke
