KCB Bank unveils single-digit mortgage for Kenya’s informal sector

KCB Bank has launched a mortgage solution specifically designed for the millions of Kenyans working in the informal sector. By offering a rare single-digit interest rate, the bank aims to dismantle the financial hurdles that have historically kept homeownership out of reach for Micro, Small, and Medium Enterprises (MSMEs) and gig economy workers.

For decades, the path to a mortgage in Kenya was paved with formal payslips and stable employment contracts, documents often unavailable to the country’s most vibrant economic drivers. KCB’s new product shifts the goalposts, targeting:

• Artisans and Boda Boda operators
• SME owners and traders
• Digital content creators
• Gig economy participants

Instead of traditional credit scoring, KCB will leverage alternative data to assess creditworthiness. This includes analyzing transactional histories, mobile money flows (M-Pesa), business records, and consistent savings patterns.

“This solution acknowledges that Kenya’s economy runs on enterprise,” says Caroline Wanjeri, KCB Bank Kenya Director of Mortgage Business. “By redefining eligibility through consistency in business performance, we are creating a credible pathway to dignified homeownership.”

Loan terms and scope

The facility is structured to be both accessible and sustainable for small-scale earners. Key features include:

Despite Kenya’s rapid urbanization rate of 4.4%, mortgage penetration remains stubbornly low at approximately 3%. This is largely due to the fact that over 80% of Kenya’s workforce operates in the informal sector, a group that has long been sidelined by rigid banking models.