Why housing gap; willingness or eligibility to mortgage financing by respondents in Uasin Gishu, Kenya

Abstract

Mortgage financing plays a significant role in enabling people to be real estate property owners and/or homeowners. Despite its significance, past statistics indicated that very few people accessed mortgage finance in Kenya. Previous research indicated that at best only 3% of households in urban areas in Kenya were eligible for mortgage financing. The study sought to determine the role of demographic (gender and age) and socio-economic factors (income and education) willingness and eligibility to mortgage financing. The study adopted explanatory research design. Target population of 807,687 was obtained by visiting all the 16 financial institutions licensed by Central Bank of Kenya offering mortgages in Uasin Gishu County. Purposive sampling was used in picking the 16 Financial Institutions. Convenience sampling technique was employed in picking the 749 respondents. Structured questionnaires were used in data collection. Both descriptive and inferential statistics were used in data analysis. Double Hurdle Model was employed using data collected on the assumption that willingness and eligibility to mortgage financing by respondents were independent decisions and influenced by the same decision factors. The results showed that age, education and income significantly influenced the willingness and eligibility to mortgage financing. Female respondents were more willing to participate in mortgage financing and more eligible to mortgage financing at all referenced points compared to male respondents. There is need for the financial institutions, ministry in charge of housing and other stakeholders to consider formulating appropriate policies, programs and products which can empower female to enable them qualify for mortgage financing. The purpose of this study was to investigate the factors that influence willingness to participate in mortgage financing and eligibility to mortgage financing in Uasin Gishu County, Kenya. The findings of this study are important to the Uasin Gishu Government, financial institutions and other stakeholders in informing appropriate policy geared towards improving mortgage financing of the respondents in Uasin Gishu, Kenya. This study will provide the larger community in the way out of alleviating the problem of squalor settlements in major towns in the county.