• The Mortgage Market in Kenya: An Overview

  • The Mortgage Market in Kenya: Some Vital Statistics

  • The Central Bank of Kenya’s Bank Supervision Report

The Mortgage Market in Kenya: An Overview

The mortgage market in Kenya is dominated by banks which have been the traditional lender of choice from pre-colonial times. Over the years, new players have emerged. Besides banks, there are now Microfinance Institutions, MFIs and Savings and Credit Cooperative Organizations (SACCOs) competing as lenders in the market.

To get a fairer understanding of the mortgage market in Kenya, it is important to note that the Central Bank of Kenya, CBK regulates both banks and microfinance institutions while SACCOs are regulated by the SACCO Societies Regulatory Authority, SASRA.

Lenders are placed under statutory compliance to report to their respective regulators and to provide information about their dealings. The Central Bank of Kenya’s Bank Supervision Department publishes a report annually of the structure and performance of Kenya’s banking sector, including commercial banks, microfinance banks, and other financial institutions.

The report also examines macroeconomic conditions, supervisory developments, and regional/international initiatives impacting the financial sector. Key performance indicators, such as asset growth, deposit increases, and profitability, are presented. Finally, the report addresses ongoing regulatory changes, particularly concerning anti-money laundering and combating the financing of terrorism.

The Mortgage Market in Kenya: Some Vital Statistics

  • The average mortgage loan size in Kenya in 2023 was 9.4 million remaining unchanged from from the average in 2022.
  • The average interest rate charged on mortgages in 2023 was 14.3%, ranging from 8.7% to 18.6%. This was an increase from the 2022 average of 12.3 %, which had a range of 8.2 % to 17.0%.
  • The increase in average interest rates in 2023 was in line with the general increase in interest rates over the year. The average loan maturity for a mortgage in 2023 was 11.7 years, with the shortest loan being 5 years and the longest 18 years. This is longer than the average mortgage loan maturity in 2022, which was 10.9 years with a minimum of 5 years and a maximum of 20 years.
  • The nine top mortgage lenders in Kenya in 2023 and their respective mortgage portfolios are:
KCB Bank Kenya Ltd Kshs. 88,083 million
Stanbic Bank Kenya Limited Kshs. 34,554 million
HFC Ltd Kshs. 24,021 million
Standard Chartered Bank Kenya Limited Kshs. 23,020 million
NCBA Bank Ltd Kshs. 21,749 million
Absa Bank Kenya Limited Kshs. 20,538 million
Co-operative Bank of Kenya Limited Kshs. 14,388 million
Family Bank Ltd Kshs. 13,046 million
Equity Bank Kenya Ltd Kshs. 12,736 million
  • The report notes that 89.5 per cent of mortgage lending in Kenya was done by these 9 institutions only.

Unlock Your Dream Home with Exclusive Buyer Representation!

Home Ownership Made Easy: We Can Help You Find Your Dream Home!
Get in touch today
  • The Central Bank of Kenya (CBK) conducted a Residential Mortgage Market Survey in 2023 to understand the state of the mortgage market. In the survey, lenders identified the following as the main obstacles to mortgage market development in Kenya:
Low levels of income
High cost of property purchases
Limited access to affordable long-term finance
Difficulties with property registration and titling
High cost of land for construction
High incidental costs 
Credit risk
Lengthy charge process timelines
Stringent land laws
Limited consumer knowledge on mortgage products
Lengthy process of security realization by banks in case of default

    The Central Bank of Kenya’s Bank Supervision Report

    The Central Bank of Kenya’s Bank Supervision Report provides the most comprehensive data available on the mortgage market even if it excludes information related to SACCOs. SASRA, the regulator for SACCOs doesn’t publish similar data. Therefore, even though it has its shortcomings, it can be deemed to be the clearest information source on the Mortgage market in Kenya.

    While the report isn’t specifically about the Mortgage Market in Kenya, it provides the most comprehensive, authoritative and insightful information available. Over the years, the report has been continually improved to provide data that compiles performance across the banking industry. When SASRA eventually catches up, the consolidation of the different regulators’ reports will provide a more meaningful picture of the Mortgage Market in Kenya.

    You can check out past editions of the Central Bank of Kenya’s Bank Supervision Report here.

    RSS
    Follow by Email
    YouTube
    LinkedIn
    LinkedIn
    Share
    Instagram
    Telegram
    WhatsApp
    Reddit
    URL has been copied successfully!
    WhatsApp chat