NAIROBI (Xinhua) --
The World Bank on Wednesday said Savings and Credit
Cooperatives (Saccos) could help ease Kenya’s housing deficit that
currently stands at 200,000 housing units.
World Bank Lead Financial Sector Specialist Mehnaz Safavian told
journalists in Nairobi that the share of Saccos financed housing in
Kenya is estimated at 90 percent as banks do not consider housing
finance to be attractive.
“Saccos provide a credit for housing finance that is much more
accessible and is provided at a cheaper rate as compared to what
many banks can offer,” Safavian said during the launch of the 15th
Edition of the Kenya Economic Update.
According to the Central Bank of Kenya, there are 25,000 bank
mortgages in the country.
Government data also indicates that the East African nation
currently produces less than 50,000 housing units annual against an
annual demand of 244,000 units forcing 61 percent of urban residents
to live in slums.
Safavian said that commercial banks have to assess credit risk of
borrowers before they advance mortgage loans. “This is difficult in
Kenya where majority of people are in the informal sector,” she
In Kenya, Saccos typically offer unsecured loans to members, while
formal mortgages remain affordable to most households.
Safavian noted that Saccos are able to offer smaller formal mortgage
loans that can be used for self construction of houses.
The World Bank official said that the majority of Kenyans are in the
informal sector and few can afford homes built by formal developers
resulting in mortgage lending being only accessible to a small
segment of the population.