Improvement of housing conditions and the performance of an aided housing scheme in selected rural areas of Kenya

Abstract

While housing issues in urban agglomerations of sub-Saharan Africa have attracted considerable scholarly attention, comparatively little is known about housing problems in rural areas. Taking issue with this shortcoming in our contribution, we first replicate a survey of housing conditions in a rural district of Western Kenya dating back to 1980. Although we observe a significant improvement of housing structures over the past 25 years, we can also establish that deficient housing conditions fall disproportionately on the poor. Departing from this result, we secondly analyze an aided self-help housing scheme which aims to facilitate the improvement of housing conditions for the poor in rural areas of Kenya. Based on data gathered from 263 face-to-face interviews we examine the financial sustainability of the underlying mortgage system and aim to identify the main drivers of mortgage default through multivariate logit analysis. Our statistical results indicate that it is mainly endogenous variables like the size and the age of the program which drive mortgage default. At the same time, typical poverty variables are not significantly correlated with mal-performance in mortgage repayment and therefore increased targeting of poorer population groups is unlikely to result in declining repayment rates.