Mortgage Financier Housing Finance has raised Sh2.37 billion from the just concluded rights issue despite a number of small scale shareholders sitting out of the issue.

The company had planned to raise Sh2.3 billion through the issuance of 115 million shares but overshot the mark by three percent.

Shareholders who had applied for the rights issue will receive a 100 per cent allocation of their initial allotment and 70 per cent of any applications for additional shares.

Frank Ireri, the managing director of HF, said the response from the rights issue reflects the confidence that shareholders have in the company's future profitability.

"The results of the subscription goes to show the level of faith that shareholders have in the ability of the company to deliver good results in the future," said Ireri.

Market analysts had feared that slow Safaricom initial public offers (IPO) refunds could have subdued the process.

According to the lead stock broker CFC Financial services and Standard Investment Bank, a number of small scale shareholders who sought to take up their allotments renounced them, citing unavailability of funds, a consequence of the slow Safaricom IPO refund process.

The capital injection is earmarked to carry out a five year strategic plan launched two years ago aimed at repositioning the company as a key mortgage player after years of subdued performance due to bad debt.

From the capital generated through the rights issue, HF said it plans to launch a number of products outlined in a five year strategic plan unveiled two years ago which seeks to re-position the company as the premiere mortgage company in the country.

Among the projects and products outlined include the construction of a commercial project in Komarock, the construction of a middle income housing units in the same area and disbursement mortgage loans to individuals in the lower and upper middle income who meets the company's criteria for mortgage loans.

"We have a huge number of mortgage applications in the pipeline which we hope to clear," said Ireri.

HF will also use the capital to support a number of mortgage and construction products launched last year as well as introduce new mortgage products targeted at the self employed, property investors. The compamy expects the ongoing review of rules governing pensions to allow use of retirement benefits in securing mortgages of up to Sh5 million to unlock new demand for home loans.

We are waiting for the enactment of the new rules to launch a product which will give HF the best leverage in the market," said Ireri.

The lenders will be the principal partners of pension schemes in the new arrangement, according to the draft, which sets stringent transparency rules for the lending organizations that will partner with the schemes.

Such organisations will be required to apply for approval from the RBA and provide capitalisation, cash reserves and experience in the provision of housing products and services.