Tapping into Kenya’s unexploited mortgage market


Kenya’s unexploited mortgage market is said to be over 1 billion Kenyan shillings despite its vibrant real estate sector.

Moreover, the East African country is reported to be the third largest nation with a high untapped mortgage market in Sub-Saharan Africa after South Africa and Namibia.

“As we stand, less than one in every 10 Kenyans living in urban areas can afford a mortgage, while rural incomes are too low to even consider…There is a huge potential for this as there are only 20,000 Kenyan mortgage holders today,” Daniel Ojijo, executive chairman at Homes Kenya Limited highlighted this during the country’s 21st Kenya Homes Expo in Nairobi.


Moreover, the country’s central bank has in the past alluded that Kenya’s low mortgage uptake to low incomes, high interest rates and soaring property prices discouraging people from borrowing.

Last year, industry players lauded the introduction of the Kenya Banker’s Reference Rate (KBRR) in view that it will help grow mortgage assets in East Africa’s biggest economy.

Nonetheless, since its introduction last year by policymakers at 9.13 per cent to act as the new base rate of all commercial bank’s lending rate and a later revision this year to 8.54 per cent, mortgage uptake in the country still remains low.

“The local housing market faces myriad challenges among them the yawning deficit now estimated to stand at an annual demand of 300,000 housing units against supply of a paltry 60,000. The mortgage rates remain high for majority of Kenyans to afford,” Ojijo said.

In the country mortgage rates average at 17 per cent, with some financial institutions reported to have rates as high as 22 per cent.

With the demand for housing units of more than 200,000 per year and growing, there is therefore an urgent need to increase the supply of new and affordable housing units.

Acting Cabinet Secretary for Land, Housing and Urban Development, Fred Matiangi said, “The government will facilitate delivery of 300,000 housing units by 2017 and as a means of addressing the funding gaps in the public sector, the government has embraced Public-Private Partnerships to leverage private sector funds both internally and externally.”