Determinants Influencing Performance of Mortgage Financing in Kenya; A Case of Housing Finance Company of Kenya

Abstract

The study's main objective was to examine how interest rates affect mortgage financing in Kenya. Theories that supported the study are asymmetric Information theory and credit risk theory, the descriptive survey was considered by the researcher since it facilitates the gathering of information over a wide geographic area and assists in describing the occurrences as they actually occur. 238 personnel from various departments of Kenya's Housing Finance Corporation made up the research population. To reach diverse employees and supervisors at different levels of management, a stratified random sample method was considered. By using questionnaires that were given to the sampled respondents, primary data was gathered. A reliability test was carried out and was accepted at 0.7 Cronbach to ensure the research instrument was reliable. Construct and content validity test was carried out to ensure the research instrument measured what it purported to measure. A pilot test was conducted on ten employees in Kenya's commercial bank mortgaging department in Nairobi. An ethical clearance letter, informed consent, and NACOSTI letter were availed to the respondents before collecting data. Data collected was presented in tables and frequencies. Inferential analysis was also utilized to further analyze the data. For parametric data, correlation analysis was done using Pearson correlation, and for non-parametric data, spearman moment correlation. According to the study's findings, the main regulations governing mortgage financing include interest rate setting on mortgage debt, governmental instruments, and fiscal actions. The study came to the conclusion that mortgage finance policies help property deals and foreclosures go through smoothly. The study made the suggestion that more research be done, taking into account the whole industry at the functional level and within the framework of the overall business strategy