THE government is considering the use of mobile money transaction records to help millions of Kenyans without formal payslips qualify for affordable housing loans as it seeks to widen access to home ownership.
Housing and Urban Development Principal Secretary Charles Hinga said traditional mortgage lending has largely favoured salaried workers with predictable monthly incomes, locking out traders, small-business owners, farmers, freelancers and other self-employed Kenyans.
The State now wants lenders to consider alternative data, including mobile money transactions, SACCO savings, rental payment histories, utility bills and business transactions, when assessing a borrower’s ability to repay a housing loan.
The proposal could significantly expand the pool of Kenyans eligible for housing finance by allowing banks and other lenders to assess actual income and spending patterns rather than relying solely on payslips and formal employment records.
“Ownership is not a single door. It should be a corridor with several doors, each opening onto the same outcome,” Hinga said during the fifth Kenya Affordable Housing Conference in Naivasha.
The push comes as more than 280,000 affordable housing units, valued at about Sh731.5 billion, are currently under construction across the country.
The PS said with thousands of units expected to enter the market, the government is increasingly focused on ensuring that Kenya has enough qualified buyers to absorb the growing supply.
A further 45,000 units are expected to be completed by December at an estimated cost of Sh52 billion, potentially accelerating the flow of newly built homes into the market.
Hinga said Kenya must rethink how mortgage eligibility is determined, with the ultimate goal of expanding the country’s mortgage market from the current level of about 30,000 loans towards one million.
For years, Kenya’s mortgage market has remained relatively small, largely serving salaried workers and higher-income households who can provide payslips, employment records and other documentation required under conventional lending models.
Yet a significant share of Kenya’s workforce earns its income outside formal employment. Traders, small-business owners, farmers, freelancers and other self-employed workers may have the capacity to make regular housing payments but struggle to demonstrate their creditworthiness using traditional mortgage requirements.
Hinga called for greater use of alternative data, including mobile-money transactions, SACCO savings, rental payment histories, utility bills and business transactions, to assess borrowers who lack conventional payslips or formal income records.
The proposed shift could open the mortgage market to millions of Kenyans whose financial lives are increasingly documented digitally but remain largely invisible to traditional credit assessment systems.
Hinga also called for the development of a standardised affordable housing mortgage, with common requirements covering borrower eligibility, underwriting, documentation, valuation and loan servicing.
Such standardisation could make mortgages easier to pool and refinance, potentially allowing Kenya Mortgage Refinance Company (KMRC) and other market players to attract more long-term capital from pension funds, insurers and other domestic institutional investors into housing finance.
“The goal is to move Kenya from approximately 30,000 mortgages towards one million by building not only houses, but the market that places Kenyans inside them,” Hinga said.
The government’s Boma Yangu platform could also become an important link between the growing supply of homes and the financial system.
More than 1.29 million Kenyans have registered on the platform, according to Hinga, creating a potential pool of prospective homeowners that lenders could tap if the system is integrated with banks, SACCOs and other financiers.
The proposed model would allow prospective buyers to move more seamlessly from registration and prequalification to allocation, financing and eventually acquisition of title.
The value of projects currently under construction also illustrates the scale of investment being mobilised into a sector that the government views as central to job creation, urban development and the reduction of Kenya’s housing deficit. The projects are supporting more than 640,000 direct and indirect jobs.
But as the value of projects under construction approaches three-quarters of a trillion shillings, policymakers, banks, mortgage financiers and developers are increasingly turning their attention from simply building houses to answering a more difficult question: who will finance the buyers?
For the financial sector, expanding access to mortgages is only one part of the affordability equation.
KCB Bank Senior Manager for Affordable Housing George Laboso said financial institutions must increasingly look beyond financing a completed house and instead support the entire housing value chain.
He pointed to constrained investment finance, rising construction costs and a shortage of serviced land as key pressures that ultimately push up the price paid by homebuyers.
“We are looking at the entire housing journey while seeking to make these solutions more accessible and responsive to evolving customer needs,” he said.
The lender said reducing the cost of housing will require greater use of alternative building materials and construction technologies, alongside wider adoption of energy-efficient designs, sustainable materials and climate-resilient infrastructure.
Affordability, KCB said, should not be measured solely by the purchase price of a house.
The cost of transport, water, sanitation, energy and access to other essential services can significantly influence the total amount households spend after acquiring a home.
This means housing developments that are cheaper to build but located far from employment centres or lack adequate infrastructure could still prove unaffordable for buyers once commuting and service costs are considered.
The debate comes at a time when Kenya is rapidly expanding the supply side of its affordable housing programme, with projects spread across counties and increasingly becoming a major source of employment and activity for the construction sector.
However, the expansion of supply will need to be accompanied by an equally significant increase in demand backed by accessible financing.
Without this, developers and the government risk creating homes that are physically affordable to construct but financially out of reach for the households they are intended to serve.
KMRC chief executive and managing director Johnstone Oltetia said the housing sector must confront both sides of the equation simultaneously, increasing the supply of affordable homes while widening access to finance.
“This year’s theme speaks to both the scale of the challenge and the promise before us: to close the twin gaps that constrain access at scale,” Oltetia said.
He said lenders, policymakers, developers and other industry players must focus on practical interventions that convert housing commitments into actual home ownership.
“Let this be the conference where we stop measuring housing by what we plan, and start measuring it by what we deliver,” Oltetia said.
That could include partnerships with SACCOs, microfinance institutions and banks, as well as financing structures designed around irregular or non-salaried income.
Shelter Afrique Development Bank Managing Director and Chief Executive Thierno-Habib Hann said the problem is not unique to Kenya.
Across Africa, conventional housing finance models have generally been built around assumptions of formal employment, reliable land records, long-term funding and mature financial markets.
These conditions, he said, do not reflect the realities of many African economies, where more than 80 per cent of the workforce earns its income within the informal economy.
As a result, millions of potential homeowners are excluded from conventional housing finance despite earning, saving and making regular payments through other channels.
Hann said housing finance must instead be designed around how people actually earn, save and live.
