Living in Nairobi decreases the probability of homeownership by nine percent, a survey by the International Finance Corporation (IFC) has found.
The survey found that in Kenya as well as other developing countries, women provide a relatively untapped housing finance market with significant unmet demand as female-headed households constitute 25 percent of households in Kenya.
According to IFC, the demand for housing finance among women in Kenya is estimated at Ksh. 1.58 trillion with the overwhelming majority of women wanting to purchase a house (91 percent), rather than an apartment.
Yet, despite high demand, women remain constrained by low income and inability to meet bank requirements.
The majority of Kenyan women currently use Savings and Credit Cooperative Societies for housing finance needs, primarily because they cannot meet the down payment or provide documents required by banks.
Use of home loans is very low in Kenya. Only seven percent of men and four percent of women had previously applied for housing loans. SACCOs and banks were the most common financing institutions.
According to the World Bank Kenya Economic Update 2017, SACCOs now account for more than 90 percent of home loans (over 100,000) due to their ability to fund unsecured construction loans and lower interest rates.
The survey found that thirty-three percent of female-headed households and 66 percent of joint-decision-making households intend to purchase housing in the next five years and 25 percent plan to make home improvements.
Most homeownership by both men and women in the country occurs beginning at age 45 and above, and most homeowners earn more than Ksh. 60,000 monthly.
IFC’s demand survey focusing on low and middle-income households found that only 16 percent of people own their homes. The survey also shows that in most homes the legal ownership of the home belongs to the men (69%), while only 13 percent held joint ownership legally and 18 percent for women.
While purchasing and building a home are the most common ways to acquire a home, the survey found that inheritance is a more common means of home acquisition among women than among both male-headed and joint households. A quarter of female-headed households inherited.
Most loan applications were intended to build a house (37 percent) or purchase land on which to build (37 percent). Home purchase loan applications made up 16 percent of the total while home improvement applications were 11 percent.
Women applicants enjoy a greater home loan approval rate than men at 87 percent compared to 60 percent for men applicants. This is because financial institutions have a perception that women clients are better payers.
Most loan clients (both men and women) said they would be happier with lower interest rates.