Abstract:
Mortgage loans have become necessary to financial institutions in Kenya, including commercial banks which earn profits on them, like any other type of loan. The goal of this project was to investigate the effects of interest rate and money supply on the growth of mortgage financing among Kenyan Commercial banks. The study adopted a descriptive research design. The population contained 35 loan lending commercial banks over a period between 1985 and 2019. Secondary data was used from desired financial statements available to the public of the singular commercial banks and other posted reports of financial institutions and establishments in conformity with the study. Time-series data were analyzed using STATA version 13 software, regression analysis and model specification tests. The hypothesis was tested using the multiple regression approach a significance level of 0.05 was used. The study found that interest rate (coef= -0.0822, p= 0.007) and money supply (coef= 0.548, p= 0.00) have significant effects on the growth of mortgage financing among Kenyan commercial banks. Kenya's central bank should put in place mechanisms to guarantee that interest rates and money supply do not have adverse impacts on bank mortgage financing. The government should guarantee currency stability since currency fluctuations may have a negative impact on commercial bank mortgage borrowing.
Description:
A Paper Presented During the 3rd Interdisciplinary International research conference held on 23rd & 24th September 2021 at Kiriri Women’s University of Science and Technology. THEME WAS: Leveraging Research towards Academia-Industry Linkages for Sustainable Development: Gender-inclusive and post covid-19 Recovery Strategy.