1. Mortgages

An arrangement where the property being purchased provides the security for funding. Other assets may be used as security for funding of another asset.


  1. Mortgagor and mortgagee agree on a long term financing arrangement

  2. Financing relates to acquisition of specific asset

  3. Mortgagor provides a contribution which is paid up-front.

  4. Repayment is over a specified long term period.

  5. Interest rate is stated with provision for variations of the determination of the finance.

Difficulties in mortgage arrangements

  1. Initial contribution is not affordable by majority of the population e.g. Nyayo Highrise

  2. Estate.

  3. Potential participants avoid getting tied up in long term loans

  4. Experiences with mortgage arrangements have been discouraging.

  5. Interest rate fluctuations make planning uncertain

2. Housing Finance Company of Kenya

This is the largest mortgage company in Kenya. It implements the government’s policy of stimulating house ownership. It is registered under the Building Society Act but operates as a finance company under the Banking Act.

3. Kenya Industrial Estate

This is a body established by the government for the purpose of promoting industrial development.

a) Enhancement of acquisition of skills necessary for industrial development

Technological innovations. The body is concerned with the provision of a base that will be considered necessary for technology development e.g. through research.

It provides capital necessary for industrial development

It provides guarantees for loans to be used for industrial development especially for small scale industries.

4. Industrial and Commercial Development Cooperation (ICDC)

This was incorporated in 1954 by the Kenya Government

The main objective is to facilitate industrial development. It concentrates on projects requiring financial participation and active extension of services

Funds provided are from the Government and commercial banks.

5. Kenya Tourist Development Corporation

This was established by the Government specifically to promote tourism. The main objectives of KTDC are:

  1. To provide assistance for establishment of tourism projects

  2. To provide financial assistance for the establishment of hotels and tourism lodgings

  3. To provide equity finance on joint venture basis in international hotel organizations.

6. Merchant Banks

Merchant Banks begun life as merchants and begun to operate in financial firms, within the 19th Century.

The merchant banks act as a principal when they buy share from the company before the issue is made. Merchant banks accept bills of exchange which deal in the leasing of industrial equipment