The World Bank has announced a major financing plan that will see Kenya receive up to Ksh174 billion to accelerate President William Ruto’s affordable housing program and expand access to low-cost mortgages across the country.
According to the Bank’s official documents, Kenya will receive Ksh48.4 billion ($375 million) in concessional financing, while the institution will also help the government secure a sustainability-linked sovereign loan worth Ksh116.3 billion ($900 million) from global commercial lenders.
Additionally, the OPEC Fund will inject Ksh9.6 billion ($75 million) into the national housing initiative, bringing total expected mobilisation to Ksh174 billion.
How the Funds Will Be Used
The financing will be channelled through the Kenya Mortgage Refinance Company (KMRC), which is mandated to increase the availability of affordable home loans and refinance mortgages issued by local lenders.
The World Bank describes the sustainability-linked loan as a tool to diversify Kenya’s financing options, lower borrowing costs, and demonstrate how governments can use debt instruments to drive social impact. Approval for the loan is expected by May 2026.
Kenya’s Growing Housing Demand
Kenya is currently grappling with a housing deficit of more than two million units, with demand increasing by about 250,000 households annually, according to the World Bank.
Yet the country produces fewer than 50,000 new homes each year, a gap that has pushed 62% of urban residents into informal settlements.
“Affordability remains a major challenge, as three-quarters of formally employed Kenyans earn below Ksh50,000 monthly—far beyond the reach of conventional mortgages,” the World Bank noted.
Global Partners Rally Behind Ruto’s Housing Agenda
The Ruto administration has aggressively pursued external partnerships to support the affordable housing initiative, which remains one of its flagship programs.
Alongside the World Bank:
The International Finance Corporation (IFC) has financed local developers constructing affordable housing.
IFC has also invested in a Green Affordable Housing Fund, aimed at boosting the supply of environmentally friendly units.
The government has leveraged credit guarantee schemes to make mortgages accessible to workers in informal and non-salaried sectors.
Kenya has also secured interest from Gulf nations, resulting in additional capital commitments to housing projects across the country.
President Ruto has argued that expanding affordable housing is key to addressing unemployment, improving living conditions and stimulating economic growth.