The World Bank has committed to helping Kenya mobilize up to $1.35 billion for its affordable housing program to address a severe housing deficit and improve access to cheaper mortgages. This includes a direct concessional loan and support for additional funding from commercial lenders. The initiative aims to support President Ruto's housing efforts amid growing urban demand.
The World Bank announced plans to assist Kenya in mobilizing $1.35 billion (Ksh174 billion) for the country's affordable housing program. This funding will help increase access to affordable mortgages and bridge the nation's housing deficit, which exceeds two million units. Demand is growing by about 250,000 households yearly, while new supply has averaged less than 50,000 units, contributing to the expansion of informal settlements where 62 percent of urban residents now live.
Under the agreement, the World Bank will provide Kenya with a $375 million (Ksh48.4 billion) concessional loan. It will also support the launch of a sovereign sustainability-linked loan to secure an additional $900 million (Ksh116.3 billion) from commercial lenders. The Organisation of Petroleum Exporting Countries (OPEC) Fund will contribute another $75 million (Ksh9.6 billion). The sustainability-linked loan is expected to be approved by May 2026 and is designed to diversify Kenya's financing sources, reduce borrowing costs, and show how sovereign debt can drive positive impact.
The Kenya Mortgage Refinance Company, a state corporation, will handle the disbursement of affordable mortgages and refinancing of home loans. Affordability remains a major challenge, as three-quarters of formally employed workers earn below Ksh50,000 per month, excluding them from traditional mortgage products, according to the World Bank.
This initiative builds on President William Ruto's push for affordable housing, which has attracted support from international partners. The International Finance Corporation (IFC) has previously financed affordable housing construction and invested in a Green Affordable Housing Fund. Additionally, credit guarantee schemes are planned to make mortgages accessible to informal or non-salaried workers. Investments from Gulf nations, including Saudi Arabia, have also been secured to fund the program.