WILLINGNESS AND ELIGIBILITY TO MORTGAGE FINANCING IN UASIN GISHU COUNTY, KENYA: APPLICATION OF DOUBLE HURDLE MODEL

Abstract

Mortgage financing plays a significant role in enabling people to be real estate property owners and or hom

eowners. Despite its significance, past statistics indicated that very few people accessed mortgage finance in

Kenya. Previous research indicated that at best only 3% of households in urban areas in Kenya were eligible for

mortgage financing. The purpose of this study was to investigate the factors that influence willingness to par

ticipate in mortgage financing and eligibility to mortgage financing in Uasin Gishu County, Kenya. The study

sought to: determine the role of demographic factors, socio-economic variables and financial variables on will

ingness and eligibility to mortgage financing. The study adopted explanatory research design. The target popula

tion was obtained by visiting all financial institutions licensed by Central Bank of Kenya offering mortgages in

Uasin Gishu County. Purposive and simple random sampling techniques were used to obtain 749 respondents

for the study distributed proportionately to the 16 financial institutions in Uasin Gishu County. The study ad

ministered structured questionnaires individually to all respondents and analyzed using descriptive and infer

ential statistics. Findings were presented in form of tables, cumulative frequency counts, percentages, graphs

and charts. A Double Hurdle Model was employed using data collected on the assumption that willingness and

eligibility to mortgage financing by respondents were two independent decisions and were influenced by the

same decision factors. The results showed that the age, rental income, tax benefit, income level, loan repayment

period and lending interest rate significantly influenced the willingness to participate in mortgage financing by

the respondents. The results also showed that age and income level of the respondents significantly determined

the eligibility to mortgage financing.