Women control Sh1.5tr share in housing loans despite barriers, says report

Wednesday, May 6th, 2020 00:00 |
Cash. Photo/PD/Courtesy

FINANCE: Women control an impressive $14.8 billion (Sh1.5 trillion) share in housing loans, a survey by the International Finance Corporation shows.

The survey done in Kenya, India and Colombia says the amount would have been much higher were it not for multiple barriers that deny women access to loans.

The market study, Her Home: Housing Finance for Women estimates housing finance among Kenyan women in Kenya at Sh1.6 trillion with an overwhelming majority of women wanting to purchase a house  at 91 per cent, rather than an apartment.

Yet, despite high demand, women remain constrained by low income and inability to meet bank requirements, says the study.

Women, who are self-employed or work in the informal job sector, often do not have income levels and income documentation that meet financial institutions’ lending requirements.

‘Women frequently lack house titles in their names, currently required by financial institutions to serve as collateral,” says the market study.

The survey found that in Kenya, as well as other developing countries, women provided a relatively untapped housing finance market with significant unmet demand as female-headed households constitute 25 per cent of households in Kenya.

Majority of Kenyan women currently use Savings and Credit Cooperative Societies (Saccos) for housing finance needs, primarily because they cannot meet the down payment or provide documents required by banks.

However, the uptake of housing loans is very low in Kenya according to the survey with only seven per cent and four per cent of women applying for them.

Saccos and banks were the preferred financing institutions.

World Bank Kenya Economic Update 2017 indicates that Saccos now account for over 90 per cent of home loans (over 100,000) due to their ability to fund unsecured constructions and lower interest rates.

According to the  survey 33 per cent of female-headed households and 66 per cent of joint-decision-making households intend to purchase a home in the next five years and 25 per  cent plan to make home improvements.

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