The World Bank is set to support Kenya’s affordable housing agenda by mobilizing up to Ksh174 billion in financing, aimed at addressing the country’s growing housing deficit. According to official World Bank records, Kenya will receive $375 million (Ksh48.4 billion) in concessional funding, alongside support to launch a sustainability-linked sovereign loan for an additional $900 million (Ksh116.3 billion) from commercial lenders.
The Organisation of Petroleum Exporting Countries (OPEC) Fund will contribute an additional $75 million (Ksh9.6 billion) to the initiative. The funds will be channeled through the Kenya Mortgage Refinance Company (KMRC), a state corporation tasked with disbursing affordable mortgages and refinancing home loans.
The World Bank highlighted the urgent need for intervention, noting Kenya’s housing deficit exceeds two million units, with demand increasing by about 250,000 households annually. “New supply has averaged less than 50,000 units, fueling the growth of informal settlements, where 62 percent of urban residents now live,” the Bank stated.
Affordability remains a key challenge, as three-quarters of employees in formal work earn below Ksh50,000 per month, limiting access to traditional mortgage products. The World Bank’s planned sustainability-linked loan aims to diversify Kenya’s financing sources, reduce borrowing costs, and showcase how sovereign debt can drive impactful development. Approval for the loan is expected by May 2026.
President William Ruto has actively promoted affordable housing, courting international investors and development partners, including the International Finance Corporation (IFC), which has financed local developers and green housing projects. Ruto has also engaged Gulf nations, with Saudi Arabia making notable contributions to Kenya’s housing sector.
This initiative is expected to expand access to affordable homes, improve mortgage availability for informal and non-salaried workers, and accelerate efforts to reduce the growth of urban informal settlements.
