Influence of technological factors and homeownership through mortgage financing in Kenya

Abstract

The uptake of mortgage just like any other business today is being affected by technological factors. The purpose of this study was to establish the influence of technological factors on the growth of home ownership through mortgage financing in Nairobi County, Kenya. A descriptive survey of 92 credit managers in 43 mortgage banks and 393 mortgage customers selected from a population 24,000 employees of three parastatals was conducted. Secondary data was collected from published financial statements of CBK, mortgage lenders, and Kenya National Bureau Statistics (KNBS) for the period of 30 years. The study established that technological factors had a statistically significantly influence on the growth of homeownership through mortgage financing in Kenya ( = 0.439, t = 13.412, p <0.05). The study also determined that decisions by mortgage customers are strongly influenced by the rapid changes that new technologies offer. The study concluded that while the technological drivers for change are often perceived as disruptive, they are neither sudden nor random and thus appropriate positioning will help mortgage firms to gain more customers and also continue attracting more clients. The study recommends that the mortgage industry players need to consider the technological factors in the policy making process which can enhance the mortgage uptake in Kenya. The study also recommends that lenders must have a technology that is capable enough to get homebuyers into their dream homes faster, customize engagement with their unique customers, stay in contact throughout the process and respond to homebuyers needs on their terms.