Kenya targets one million mortgages as affordable housing drive gains pace
The approach is aimed at bringing more Kenyans without conventional payslips or formal income records into the formal housing finance market as the government scales up its affordable housing programme.
Nairobi, Kenya - In a bid to expand its affordable housing program, Kenya is looking to expand its mortgage market by adopting alternative data sources for mortgage qualification. Principal Secretary for Housing and Urban Development Charles Hinga announced plans to incorporate mobile-money transactions, SACCO savings, rental payment histories, utility bills and business transactions into the mortgage approval process.
This shift aims to include a larger portion of Kenyans, who currently lack formal employment records, in the housing finance market. Currently, over 280,000 housing units are under construction, valued at approximately KSh731.5 billion, and supporting more than 640,000 jobs. However, Hinga cautioned against solely focusing on the number of houses built, emphasizing the importance of ensuring that Kenyans can actually own the properties being constructed.
He urged the development of a standardized affordable housing mortgage with common requirements for eligibility, underwriting, documentation, valuation and loan servicing. The Boma Yangu platform, with more than 1.29 million registered Kenyans, could be integrated with lenders to streamline the home-buying process. Financial institutions acknowledge that expanding mortgage access must be balanced with the cost of constructing and delivering housing.
KCB Kenya's Director of Mortgage Business, Caroline Wanjeri, highlighted factors such as rising construction costs, inadequate supply of serviced land, and constrained investment finance, which contribute to the final cost of homes. KCB is exploring alternative building materials, energy efficiency measures, and sustainable construction to reduce costs and ensure affordability.
Globally, shelter finance models often assume formal employment, reliable land records, and long-term funding, which are limited in many African economies. With over 80% of Africa's workforce employed in the informal sector, housing finance models must adapt to reflect how people actually earn and save. The Kenya Mortgage Refinance Company (KMRC) emphasized the need to address both the supply of affordable homes and the access to financing simultaneously.
As Kenya enters a critical phase of its affordable housing program, the focus is on translating rising construction activity into actual home ownership for ordinary households.
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