For years, successive Kenyan administrations have championed the mortgage market as the primary route to homeownership, with an ambitious goal of pushing active mortgage accounts past the 100,000 mark. But a newly released international report is raising serious questions about whether the mortgage model is even the right tool for a country like Kenya in the first place.
The United Nations Human Settlements Programme — widely known as UN-Habitat — published a report in May 2026 arguing that the mortgage system is structurally discriminatory when applied in developing economies. Rather than opening doors to homeownership for the wider population, the report contends that mortgage financing largely serves high-income earners, leaving the majority of Kenyans on the outside looking in.
The people most affected are those working in Kenya’s sprawling informal sector — millions of Kenyans who rely on daily wages, small-scale trade, or subsistence farming. Without steady, verifiable income and formal employment contracts, most of these workers cannot meet the basic requirements that commercial banks demand before approving a home loan.
The global picture underlines just how steep those barriers are. According to the UN-Habitat report, only one in four people who applied for a housing loan globally in 2023 actually received one. Given that formal employment remains limited in Kenya and household incomes are generally low, the proportion of successful applicants locally is likely far lower than even that global average.
Kenya’s housing deficit is not a new story. City populations in Nairobi, Mombasa, Kisumu, and other urban centres continue to swell, yet the supply of decent, affordable housing consistently falls short of demand. Government after government has promised to bridge the gap, but the heavy focus on growing the mortgage market has done little to address the realities facing ordinary Kenyans who will never qualify for a bank loan.
Experts and housing advocates have long argued that Kenya needs a broader toolkit. Models such as tenant purchase schemes, government-backed social housing, savings cooperatives, and rent-to-own arrangements may stand a better chance of reaching the majority of Kenyans than a mortgage system built around formal employment and stable monthly salaries.
The UN-Habitat report adds weight to those calls. If Kenya is serious about tackling its housing shortage, policymakers may need to move beyond the mortgage market as a centrepiece strategy and invest in solutions that reflect where most Kenyans actually are financially — not where the banking system wishes they were.
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