AN INVESTIGATION INTO THE FINANCIAL FACTORS AFFECTING GROWTH OF MORTGAGE FINANCING IN KENYA

Abstract

The increase in size and openness, in both the markets and the financial institutions in Kenya has allowed the mortgage sector to expand phenomenally, raising concerns about the potential rise of risks. A concern regarding the mode of financing and risks associated has been overlooked with the country experiencing boom and therefore creating a major flux hence with the surge in residential housing prices between the year 2000 and 2015. Hence the need to conduct this research to bridge the gap between popular concern and academic inquiry by investigating the financial factors that affect development of mortgage finance in Kenya.

The population of study was financial institutions providing mortgage financing and the consumers of mortgage finance in kitengela town. The collected data was coded, entered and analyzed using the STRATA program; the analysis of the result was based on descriptive statistics (mean, standard deviations, frequencies and percentages. The study used both primary and secondary data from published licensed mortgage financial institutions operating in Kenya annual reports and financial statements. The independent variable was financial factors affecting mortgage finance while dependent variable was development of mortgage in Kenya. Study results made recommendation which aims at improving the risks associated with mortgage finance as well as measures which would ensure risk management, equity and sustainability of the mortgage finance in Kenya and this effect has been characterized by changing models and rising influence of the real estate market in institutional portfolios. This is evidenced by the correlation between the independent variables and dependent variable under the study.