The Nexus Between Mortgage Financing Structures and Project Success in Kenya
DOI:
https://doi.org/10.65150/EP-jmrr/V2E2/2026-06Keywords:
Mortgage financing, project performance, construction projects, housing delivery, Kenya.Abstract
Mortgage financing has become an increasingly important mechanism for supporting housing delivery in Kenya, particularly under the Affordable Housing Programme. However, the extent to which mortgage financing influences the performance of mortgage-financed construction projects (MFCPs) remains unclear. This study investigates the relationship between mortgage financing characteristics and project performance, focusing on five financing dimensions—ease of access, adequacy, reliability, favourability, and simplicity—and five performance indicators—budget adherence, schedule adherence, quality, safety, and cash flow. A survey research design was adopted, targeting 1,063 MFCPs initiated during the 2021/2022 financial year. Data were collected from site agents and clerks of works using structured questionnaires and analyzed through descriptive statistics and Pearson correlation. The findings reveal that while developers perceive mortgage financing as reliable and generally adequate, its direct correlation with project performance is weak or modest. Adequacy and favourability of financing terms showed marginal significance, suggesting that sufficient loan amounts and competitive interest rates can ease cash flow pressures and indirectly improve project outcomes. Strong intercorrelations among financing aspects indicate that developers view mortgage products holistically, where improvements in one dimension often coincide with improvements in others. The study concludes that mortgage financing is a critical enabler of housing delivery but not the dominant determinant of project success. Effective performance requires combining financing improvements with robust project management, contractor capacity building, and risk mitigation strategies. Recommendations include enhancing the adequacy and favourability of mortgage products, simplifying loan terms, and integrating financing reforms with sectoral governance and capacity development.
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Copyright (c) 2026 Julius Mungai Muigai (Author)
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