Ksh 444 Billion Worth Of Loans Given To Real Estate In 3 Months

By Soko Directory Team / Published July 26, 2021 | 12:55 pm

KEY POINTS

The gross loans advanced to the real estate sector increased by 11.4 percent to approximately 444.0 billion shillings in Q1’2021 from approximately 439.0 billion shillings advanced in Q4’2020.

The gross loans advanced to the real estate sector increased by 11.4 percent to approximately 444.0 billion shillings in Q1’2021 from approximately 439.0 billion shillings advanced in Q4’2020.

The gross loans advanced to the buildings and constructions sector increased from 123.0 billion shillings in Q4’2020 to 125.0 billion shillings in Q1’2021 while loans advanced to the tourism sector increased from 102.0 billion shillings to 104.0 billion shillings.

The increase is attributable to layoffs, business closures affecting the commercial and retails sectors, and travel restrictions triggered by the pandemic affecting the performance of the hospitality industry.

The gross non-performing loans to the real estate sector increased by 14.8 percent to 70.5 billion shillings in Q1’2021 from 61.4 billion shillings recorded in Q4’2020, accounting for 15.9 percent of the total real estate loan book.

The increase was attributed to economic disruptions by the Covid-19 pandemic reducing cash flows and the ability to service debt.

With regards to the loans to the sector, real estate accounted for 14.6 percent of the total loan advances valued at Kshs 444.0 bn compared to the total Kshs 3.0 trillion, while building and construction, and tourism sectors accounted for 4.1 percent and 3.4 percent of the total loan book.

Kenya’s mortgage currently standing at 26,971 as of 2020, representing a 3.5 percent decline from 27,943 in 2019 due to the economic disruptions that came about from the Covid-19 pandemic.

The increase in mortgage accounts will boost the homeownership percentage in the country which continues to remain relatively low at 21.3%, compared to other countries such as the USA and UK at 65.3 percent and 65.2 percent, respectively as of 2020.

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