KCB Bank Kenya has unveiled a new mortgage financing solution with a single-digit interest rate. The product aimed at helping Kenyans in the informal sector access affordable home ownership.
The new product targets micro, small and medium enterprises (MSMEs), artisans, boda boda operators, gig economy workers, and digital content creators whose incomes are often irregular but consistent. Also, those who have traditionally struggled to qualify for conventional mortgage financing.
The initiative is expected to support Kenya’s affordable housing agenda by expanding access to home ownership beyond formally employed salaried workers.
Flexible qualification criteria for borrowers
To qualify for the mortgage facility, applicants must have operated their businesses for at least two years.
The loans range from KSh1 million to KSh4 million, with a maximum repayment period of 15 years. It’s offering flexible terms tailored to the realities of informal sector earners.
Unlike traditional mortgage products that depend heavily on payslips and employer contracts, KCB’s new solution uses alternative methods to assess creditworthiness, including transactional history, mobile money flows, business records, savings patterns, and other financial behaviour indicators.
KCB says product will improve financial inclusion
Speaking during the launch, KCB Bank Kenya Director of Mortgage Business, Caroline Wanjeri, said the product reflects the bank’s commitment to supporting Kenya’s changing workforce landscape.
“For years, Kenya’s mortgage uptake has been concentrated among formally employed and middle- to high-income earners, a scenario that has kept mortgage penetration levels at around 3 per cent.
With more than 80 per cent of Kenya’s workforce operating in the informal sector, the new mortgage solution seeks to increase financial inclusion, ease the rigid credit assessment mortgage models, and enable an increase in homeownership for Kenyans,” said Wanjeri.
She noted that the solution recognises enterprise as the backbone of Kenya’s economy.
“By combining alternative credit assessment and financial discipline, we are making mortgage financing accessible by redefining eligibility through consistency in business performance as a credible pathway to dignified home ownership,” she added.
Addressing Kenya’s housing deficit
Kenya continues to face a major housing backlog driven by rapid urbanisation, with an annual urban growth rate of 4.4 per cent placing pressure on available housing stock.
Low-income households remain the most affected, facing limited access to decent and affordable housing.
According to Kenya’s Vision 2030 Third Medium Term Plan (MTP III), affordable housing remains a key pillar in achieving inclusive economic growth and sustainable development.
However, progress has been slowed by limited investment finance. This has been caused by rising construction costs for developers and reduced affordability for buyers across the housing value chain
KCB says the new mortgage solution is a timely intervention that will help unlock long-term capital and make home ownership more attainable for ordinary Kenyans.