The World Bank has announced plans to mobilize $1.35 billion to help Kenya expand access to affordable mortgages and address its widening housing deficit. The financing package includes $375 million in concessional funding from the Washington DC-based lender and support for a $900 million sovereign sustainability-linked loan to be raised from commercial lenders, according to disclosures on the Bank’s website.
The initiative will be complemented by an additional $75 million from the OPEC Fund for International Development. Funds will be channeled through the state-owned Kenya Mortgage Refinance Company (KMRC), which will use the capital to disburse affordable mortgages and refinance existing home loans.
According to the World Bank, the planned sustainability-linked loan is “designed to diversify Kenya’s financing sources, reduce borrowing costs, and demonstrate how sovereign debt can be structured to drive impact.” The loan is expected to be approved by May 2026.
Kenya currently faces a housing deficit exceeding two million units, with demand rising by about 250,000 households each year. However, new supply averages fewer than 50,000 units annually — a shortfall that has fueled the growth of informal settlements, where an estimated 62% of urban residents now live.
Affordability remains a major obstacle. The World Bank noted that three-quarters of formally employed Kenyans earn less than 50,000 shillings ($330) per month, effectively pricing them out of traditional mortgage products. The initiative aims to make home ownership more attainable for low- and middle-income households, while also demonstrating innovative approaches to sustainable financing in emerging markets.
