Housing Finance in Kenya


CAHF has partnered with FSD Kenya in support of its Affordable Housing Project, which was launched in 2020 as part of a broader process to develop a coordinated and collaborative FSD Network Strategy for Affordable Housing in Kenya. The joint strategy, encompassing FSD KenyaFSD Africa and FSD Africa Investments (FSDAi), was developed with the support of CAHF, and FSD Kenya has used this collaborative Strategy as a foundation from which it has designed its Affordable Housing Project. In November 2020, the Programme Investment Committee agreed on a three-year grant programme to support the implementation of the Affordable Housing Project, and CAHF is a strategic collaborator for FSD Kenya in implementing this project.
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Affordable Housing and Housing Finance in Kenya

While only 28% of the population in Kenya is urbanised, 61% of the urbanised live in informal settlements. An estimated 10million Kenyans countrywide, and 36% of Nairobi’s population, live in slums. Urban centers are also characterised below levels of homeownership at 21.3%, compared to the national average of 61.3%. Over the last four years, the government has been forging partnerships with the private sector and development partners under the Big Four Agenda to deliver approximately 500 000 housing units to resolve the existing housing deficit an estimated 2 million units growing by 200000 units a year. However, though progress has been made in the delivery and development of related infrastructure, the supply is yet to match the demand. The deficit is expected to grow further, fueled by the relatively high population growth rate of 2.25% and an urbanisation rate of 4.01%.

Kenya’s gross domestic product  (GDP)contracted by  0.3% in 2020 owing to supply and demand disequilibrium exacerbated by COVID-19. In 2021, the economy is expected to grow by 4.5%, supported by growth in pandemic-affected sectors of tourism and trade,6driven by an upturn in economic activities with the easing of COVID-19-related restrictions, recovery in the service sector on the back of the vaccine rollout, and adequate agricultural output boosted by demand and the gradual reopening of the global economy. Inflation remained within the Central Bank of Kenya target of between 2.5% to 7.5% with a year-on-year rate of 6.44% in July 2021, largely driven by price rises in food and non-alcoholic beverages, housing, water, electricity, fuel, and transport.

There was general optimism in the first half of 2021, with the average Standard Bank Monthly Purchasing Managers’ Index, an important tool in measuring the performance of the service industry and manufacturing activities in the economy, for the first five months of 2021 averaging 49.7, higher than 42.4 recorded in the first half of 2020, indicating an improvement in private sector activity.

Find out more information on the housing finance sector of Kenya, including key stakeholders, important policies, and housing affordability:

Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2021 edition, which has up-to-date profiles for 55 African countries.

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