State Rethinks Mortgage Rules, Eyes Mobile Money Data for Housing Loans
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Kenya's government wants lenders to use mobile money transactions, SACCO savings and rental payment histories to assess borrowers, as it seeks to expand the mortgage market from about 30,000 loans towards one million.
The Kenyan government is considering the use of mobile money transaction records and other alternative data to help millions of Kenyans without formal payslips access housing finance, Housing and Urban Development Principal Secretary Charles Hinga said.
Speaking at the fifth Kenya Affordable Housing Conference in Naivasha, Hinga said traditional mortgage lending has largely favoured salaried workers with predictable monthly incomes, locking out traders, small-business owners, farmers and freelancers. The State now wants lenders to consider mobile money transactions, SACCO savings, rental payment histories, utility bills and business transactions when assessing a borrower's ability to repay a housing loan.
The push comes as more than 280,000 affordable housing units, valued at about Sh731.5 billion, are under construction across the country. A further 45,000 units are expected to be completed by December at an estimated cost of Sh52 billion, potentially accelerating the flow of newly built homes into the market.
Hinga said Kenya must rethink how mortgage eligibility is determined, with the ultimate goal of expanding the country's mortgage market from about 30,000 loans towards one million. He also called for the development of a standardised affordable housing mortgage, with common requirements covering borrower eligibility, underwriting, documentation, valuation and loan servicing, which could allow the Kenya Mortgage Refinance Company and other players to attract more long-term capital from pension funds and insurers.
More than 1.29 million Kenyans have registered on the government's Boma Yangu platform, according to Hinga, creating a potential pool of prospective homeowners that lenders could tap if the system is integrated with banks, SACCOs and other financiers, allowing buyers to move more seamlessly from registration and prequalification to allocation, financing and acquisition of title.