In 2025, the average mortgage size taken by Kenyans is approximately Sh9 million, a slight decrease KCB Bank is shifting its mortgage strategy to tap small businesses and informal sector workers, using transaction data and financial records rather than traditional payslips.
The plan aimed at expanding home loan uptake in Kenya, targets micro, small and medium-sized enterprises (MSMEs), including traders, artisans and gig economy workers. The reliance on payslips for the loans has seen the country strain to grow its mortgage uptake, which remains among the lowest in the region at about three per cent.
A survey by pension firm Zamara, the Centre for Affordable Housing, Finance in Africa and Financial Sector Deepening Kenya shows that only 4 per cent of Kenyans have the income to afford a mortgage of Sh10 million. That is about 6,146 of 145.205 pension scheme members.
However, under the plan, KCB says it will assess borrowers based on business performance, including mobile money transactions, bank statements, savings patterns and cash flow consistency, marking a departure from conventional lending models that prioritise salaried employment and formal contracts.
KCB Bank Kenya director of mortgage business, Caroline Wanjeri said that for years, Kenya’s mortgage uptake has been concentrated among formally employed and middle to high income earners, stifling home loans uptake. “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.
The lender will offer loans ranging from Sh1 million to Sh4 million, repayable over up to 15 years, at single-digit interest rates, in what signals increased competition in Kenya’s affordable housing finance segment. The strategy reflects a broader industry shift as lenders seek new growth areas amid slow credit uptake in traditional segments.
By targeting the informal sector which accounts for more than 80 per cent of Kenya’s workforce, the lender is attempting to unlock a largely underserved market with demonstrated but undocumented income streams. “This solution acknowledges that Kenya’s economy runs on enterprise.
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,” Wanjeri added.