Factors influencing the development of secondary mortgage market in Kenya: With special emphasis on mortgage backed securities

Abstract

The primary objective of the study was to establish the factors influencing the development of the mortgage backed securities in Kenyan market. The researcher was prompted to under take this study since no direct research had been done on this area. In order to facilitate the study nine questionnaires were administered and all responded. The results showed that there was urgent need to develop a secondary mortgage market in Kenya. Most of the firms interviewed showed strong capital base which is prerequisite for securitization. The high cost' of finance which is short term cannot support long term investments therefore there is need for a long term sources of finance. The default rate is at manageable level hence not a threat to securitization. The study further revealed that the loan portfolio is adequate to support securitization.