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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To download a PDF version of the full 2023 Kenya country profile, click here.
Affordable Housing and Housing Finance in Kenya

The population of Kenya is over 50.6 million as of 2022, with a projected decline in annual population growth from 1.8% in 2022 to 1.2% in 2045.[1] Urbanisation is a dominant trend with 29% of the population residing in urban centres.[2] Four million Kenyans, approximately 56% of the urban population, are living in slums. Kenya’s urbanisation rate of 4.4% surpasses the global average of 2.1%.[3] Moreover, the poverty rate stands at 38.6% in 2021 indicating that 19.1 million individuals are living below the poverty line, with disparities between urban (34.1%) and rural (40.7%) populations. Further, 34.7% of households nationally, or 4.4 million households, live in poverty.[4]

The Government is implementing five pillars in the Bottom-up Economic Transformation Agenda (BETA) with housing and settlement as one of the pillars. The plan aims to turn the housing crisis into an economic opportunity by increasing the supply of new houses to 250 000 per annum and percentage of affordable housing supply from 2% to 50% by 2027.[5] Currently, developers only build 50 000 units, with 49 000 units targeting the upper-middle and high-end market segments.[6] Various road infrastructure projects have improved connectivity and boosted property demand and prices. The construction sector’s growth of 4.1% in 2022 underscores its significance in the country’s socio-economic development.[7]

Amid a resilient economic growth rate of 4.8% in 2022, Kenya’s economy faced global shocks and the real Gross Domestic Product (GDP) reached Ksh13.368 trillion (US$94.98 billion), with the real estate sector contributing 8.6%.[8] The inflation rate was 6.73% as at  August 2023 and the average lending interest rates for loans and advances increased to 13.5% in August 2023 from 13.31% in June 2023, thus negatively impacting housing affordability and mortgage accessibility. The Central Bank Rate (CBR) was raised to 10.5% in August from 9.5% in May 2023. The Kenyan Shilling depreciation against key trading currencies including against the US Dollar reached Ksh147 in September 2023 compared to Ksh 119 in September last year, a c. 20% depreciation. Fluctuating interest rates further contribute to the complex housing finance landscape.[9]

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 2023 edition, which has up-to-date profiles for 55 African countries.

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