Kenya targets one million mortgages as affordable housing drive gains pace
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Kenya is pushing lenders to move beyond traditional payslips and build an inclusive mortgage market, targeting growth from about 30,000 mortgages towards one million as its affordable housing programme scales up.
Kenya is seeking to build a more inclusive mortgage market by encouraging lenders to look beyond traditional payslips and formal income records, as the government scales up its affordable housing programme.
Principal Secretary for Housing and Urban Development Charles Hinga said Thursday that more than 280,000 housing units are currently under construction, representing about KSh731.5 billion in contract value and supporting more than 640,000 direct and indirect jobs. Of these, more than 45,000 units are expected to be completed by December at an estimated cost of KSh52 billion.
Speaking at the opening of the 5th Kenya Affordable Housing Conference (KAHC) in Naivasha, Hinga cautioned that the number of houses constructed should not be the ultimate measure of success, arguing that the focus must shift towards ensuring Kenyans can actually own the homes being built. 'Ownership is not a single door. It should be a corridor with several doors, each opening onto the same outcome,' he said.
Hinga called for the development of a standardised affordable housing mortgage with common requirements covering eligibility, underwriting, documentation, valuation and loan servicing, as well as a common affordability framework that reflects how non-salaried Kenyans earn, save and spend. Under the proposed approach, lenders could use mobile-money records, SACCO savings, rental payment histories, utility bills and business transactions as part of their assessment of a borrower's creditworthiness.
He said the Boma Yangu platform, which has more than 1.29 million registered Kenyans, could be integrated with lenders to create a smoother process from registration and prequalification through allocation, financing and title issuance. '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,' he said.
Financial institutions say expanding mortgage access cannot be separated from the cost of producing and delivering housing. KCB Kenya Director of Mortgage Business Caroline Wanjeri said constrained investment finance, rising construction costs and inadequate supply of serviced land were among the factors driving up the final cost of homes.