Central Bank of Kenya (CBK) Governor Njunguna Ndungu has called for the widening of the local mortgage market to deal with the rising demand for housing.
A study by CBK and the World Bank in June 2010 on mortgage finance in Kenya reveled that the market grew from KSh 19 billion in 2006 to KSh 61 billion in 2010. Over the same period the number of mortgages in the banking sector grew from 7,580 to 13,803.
The survey also identified key constraints in the mortgage market such as:
- Low levels of income
- Access to long term funds
- Credit risk due to absence of historical information
- Relatively high interest rates
- Difficulties with property registration
Ndung’u revealed that measures have since been taken to avert such challenges including issuance of corporate and housing bonds and the roll-out of credit information sharing mechanism.
Ndungu was speaking during the launch of the Housing Finance current account yesterday.
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