Kenya Seeks to Expand Mortgage Access Using Mobile Money, SACCO Savings and Rental Records

Kenya is seeking to expand access to mortgage financing by encouraging lenders to consider alternative measures of creditworthiness, including mobile-money transactions, SACCO savings, rental payment histories, utility bills and business transactions, according to Principal Secretary for Housing and Urban Development Charles Hinga.

Speaking at the fifth Kenya Affordable Housing Conference in Naivasha, Hinga said more than 280,000 housing units are currently under construction, representing about Sh731.5 billion in contract value and supporting more than 640,000 direct and indirect jobs. More than 45,000 of the units are expected to be completed by December at an estimated cost of Sh52 billion.

Hinga said the rapid growth in housing construction must be matched by an expansion of the market capable of purchasing the units. Traditional mortgage lending has largely favoured borrowers with formal employment, leaving out traders, small-business owners, farmers, freelancers and other self-employed Kenyans who lack conventional documentation to prove their earnings.

Under the proposed system, financial institutions could consider mobile-money transaction records, SACCO savings, rental payment histories, utility bills and business transactions when assessing borrowers. Hinga also called for a standardised affordable housing mortgage with common requirements for eligibility, underwriting, documentation, valuation and loan servicing.

The government is also seeking to integrate the Boma Yangu platform with financial institutions. The platform currently has more than 1.29 million registered Kenyans and could link registration, prequalification, housing allocation, financing, acquisition and issuance of title documents. "The goal is to move Kenya from approximately 30,000 mortgages towards one million by building not only houses, but the market that places Kenyans inside them," Hinga said.

Financial institutions cautioned that expanding mortgage access must go hand in hand with reducing the cost of producing and delivering houses. KCB Kenya's Director of Mortgage Business Caroline Wanjeri said constrained investment finance, rising construction costs and inadequate serviced land were contributing to higher house prices, while Shelter Afrique Development Bank CEO Thierno-Habib Hann noted that with more than 80 percent of Africa's workforce earning income in the informal economy, housing finance models must be adapted to how people actually earn and save.