Housing finance system in Kenya

Chapter one places the housing sector within a macroeconomic context. It shows the declining share of the GDP and of fixed capital stock in residential housing, contrasts these trends with those that would more normally be associated with current changes in urbanization, population, and income, and suggests that financial policy has constrained the supply of housing credit. An estimate of housing needs concludes the chapter. Chapter two briefly overviews government housing programs and their financing. Chapter three describes the overall financial sector as a framework for housing finance and outlines the dramatic changes in financial innovation in Kenya, identifies some of the problems with this evolution, and indicates important beneficial reforms and trends now taking place; it concludes with a review of macro financial policy and its impact on housing finance. Chapter four focuses on housing finance institutions, their growth, regulatory problems, resource mobilization and lending activities, and liquidity needs. Chapter five considers how housing needs, financial policy generally, and the current housing finance system interact to affect resource mobilization; it also discusses some of the broader macroeconomic problems with the current system. Chapter six provides recommendations. A study of the role of the informal housing sector is being published separately. (Author abstract, modified)