FACTORS INFLUENCING PERFORMANCE OF MORTGAGE FINANCING AMONG COMMERCIAL BANKS IN KISII TOWN, KENYA

Demand for residential and commercial houses in Kenya increased in the recent years; consequently the growth rate in mortgage loans has grown steadily at 14% annually. But the mortgage loan portfolio in the banks remains small. Banks are financial intermediaries that serve as resource mobilization points in the economy. The main objective of this study was to assess the factors influencing mortgage financing by commercial banks in Kenya. This study adopted descriptive research design which helped in obtaining information concerning the current status of the factors influencing commercial banks mortgage lending. Data was obtained through self-administered questionnaires with closed and open ended questions. Data analysis which includes regression and correlations was done to establish factors influencing mortgage financing by commercial banks in Kenya. The study established that commercial banks can be able to identify various risks they face in lending to the borrower; this would help them to determine their interest rates through mortgage lending, the study further establishes that employment status of clients affects mortgage financing among banks, the study recommended that banks are be able to identify various risks they face in lending to the borrower; this would help them to determine their interest rates.