Theses and Dissertations
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Item Role of Financing Options on the Growth of Real Estate in Kenya: A Survey of Real Estate Developers in Nairobi Metropolis(KCA University, 2016) Mungai, Daniel.K.Real estate business is an undertaking that has been perceived by many as a project that needs a lot of capital to initiate. In Kenya, investing in real estate hasn't been such a huge venture until the last 10 years. This research therefore aimed at establishing the perceived role of financing options on the growth of real estate in Kenya with a focus in Nairobi Metropolitan area. It is often difficult to fund big projects in real estate solely from personal savings. Therefore there is a need to use other sources of finance such as equity or self-financing, or mortgage from financial institutions like commercial banks, insurance companies and mortgage institutions or venture capital. This research paper was guided by four specific objectives; To assess influence of mortgage financing option on the growth of real estate in Nairobi Metropolis; To evaluate the effect of savings financing option on the growth of real estate in Nairobi Metropolis: To evaluate the effect of venture capital financing option on the growth of real estate in Nairobi Metropolis: To examine the influence of equity financing option on the growth of real estate in Nairobi Metropolis. This study used primary data collected from registered developers in Kenya with an interest in Nairobi Metropolis. The sample size was 81 out of a population of 100 developers registered with Kenya Property Developers Association. The study employed descriptive research design and data was analyzed through multiple regression analysis. This study found out that the variables addressed, only explain 7.1% of the growth of Real estate in Kenya. Other factors outside this research explain 92.9% of the growth in real estate. Due to the low explanation the researcher employed confirmatory factor analysis to determine model perfect of fit. The study found mortgage financing and equity financing the only two variables with a good fit. From this study, then there is a need for more research on those other factors that have spurred growth in real estate in Kenya. This study was carried out during the period May to August 2016.Item Determinants Of Demand For Mortgage Finance In Kenya: A Case Of Nairobi County(KCA University, 2015) Irungu, Alfred K.There is a low demand for mortgage finance in Kenya this was demonstrated by the few number of mortgage accounts in Kenya. The Central Bank of Kenya report shows that there were only 22,013 mortgage accounts in Kenya in 2014. This number is very low when compared to the demand for housing and population in the country. Based on these statistics, this study aimed to determine the determinants for the demand of mortgage finance in Kenya. The study was focused on the effect of, price of mortgage substitutes, cost of mortgage, income levels and promotion on the demand for mortgage in Kenya. The target population of this study was applicants for mortgage finance both successful applicants and those who were not successful. Random sampling technique was used to obtain a sample size of 384 respondents. Data was collected using structured questionnaires. The collected primary data was analyzed using Statistical Package for Social Science (SPSS) version 20. A binary logistic regression analysis was conducted on the data set to ascertain the effects of independent variables on dependent variable. The Pearson Product was used to analyze the data in which correlation coefficient (R) and the coefficient of determination (R2 ) of the variables was established. The findings from the analysis were organized and summarized in form of percentages, means ratios and frequencies and presented using tables and pie charts. The results in the multivariate logistic regression indicated that the likelihood of cheap mortgage substitutes resulting to low demand for mortgage finance in Kenya was 4.911 times higher than more costly mortgage substitutes. The findings further indicated that the likelihood of high legal cost and high stamp duty cost causing low mortgage demand are 2.550 and 2.274 times higher than when the costs are low. The findings also indicate that the likelihood of low-income levels causing low demand for mortgage substitutes was 6.369 high than high income levels. Finally, the findings indicate that the likelihood of lack of promotion causing low mortgage demand was 5.808 higher than having promotion. The study recommended that mortgage financing institutions should consider the cost of mortgage substitutes, cost of mortgage, income level and promotion in order to increase the demand for mortgage finance in Kenya.Item Determinants Of Mortgage Delinquency A Perception Survey Of Commercial Bank Mortgagors(Kca University, 2016) Wamalwa, Esther N.This study focused on a survey of the determinants of mortgage delinquency amongst commercial banks mortgagees in Kenya. Undoubtedly, financial systems and economic growth are strongly interlinked. It is therefore important to study and identify the causes of mortgage delinquency which ultimately has an effect on economic growth. The purpose of this study was to determine the determinants of mortgage delinquency amongst commercial banks mortgagees in Kenya. The study sought to determine the relationship between mortgage individuals characteristics and delinquency amongst commercial banks mortgagees in Kenya, to evaluate the relationship between mortgage specific characteristics on mortgage delinquency amongst commercial banks mortgagees in Kenya and to explore the role of mortgage characteristics on mortgage delinquency amongst bank mortgages in Kenya. The research adopted descriptive research design. The target population was 38 registered commercial banks in Kenya offering mortgages. The respondents were 2 senior financial officers in the mortgage department of each of the 38 banks. Due to the population size, a census approach was used. Primary data was obtained through self-administered questionnaires. The data was analysed using exploratory and confirmatory factor analysis. Quantitative analysis involved the use of pie charts, bar graphs, means and percentages to present the information. The processed data was presented in tables, graphs and explanation given in prose to explain determinants of delinquency amongst commercial banks mortgagees in Kenya. The study deployed inferential statistics that involved the use of ANOVAs and regression analysis to study the effect of independent variable on the dependent variables. The findings were presented using tables and figures. The study found that mortgage characteristics had the highest significant effect in mortgage delinquency followed by mortgage specific characteristic while mortgage individual characteristics had no effect on mortgage delinquency. Mortgage characteristic had a beta value (β1 = 2.005). This meant that on an integrated scale, a unit change in Mortgage characteristic resulted in a 2.005 positive change in mortgage delinquency. A unit change in mortgage specific characteristic (β2 = 1.359) would result in a 1.359 positive change in mortgage delinquency and finally a unit change in mortgage individual characteristic (β3 = -1.183) resulted in a negative change in mortgage delinquency. A conclusion can therefore be drawn from the study that mortgage characteristics and mortgage specific characteristics affect mortgage delinquency. The banks should involve the board’s credit committee in selecting and vetting the mortgage applicants. The bank’s credit committee should deploy bank rehabilitation process by calling clients to pay overdue mortgages. Interest rates charged on various types of mortgages should be able to cover the cost of the mortgage and meet good profit margin. The bank’s lending policy should be periodically reviewed to reflect the prevailing economic conditions. The lending authority and mortgage approval should be decentralized. Information from credit reference bureaus should be used in appraising the customer’s mortgages.Item Effect Of Financing Sources On Performance Of Real Estate Sector In Nairobi County, Kenya(Kca University, 2018) Kamau, Samuel G.Real estate sector has gained a lot of interest from investors with the perceived high returns. Kenyan government has on the other hand recently capped interest rates on loans. Considering that most investors relied on mortgage financing to invest in real estate sector, the investors have to consider other sources of financing. Venture capital financing on the other hand has left some investors shortchanged by the venture capitalists. This study sought to establish the impact of financing sources on real estate sector’s performance in Nairobi County, Kenya. The specific objectives were: to investigate the effect of mortgage financing on the performance of the real estate sector in Nairobi County, Kenya; to determine the effect of venture capital financing on the performance of the real estate sector in Nairobi County, Kenya and to determine the effect of equity financing on the performance of real estate sector in Nairobi County, Kenya. The study reviewed theories relevant to financing sources and performance namely; pecking order theory, trade off theory and agency theory. Descriptive research design was adopted. The study population was 64 real estate developers registered with Kenya Property Developers Association in Nairobi County, Kenya. The study conducted a census of all 64 real estate developers. The study used primary data. Questionnaires were utilized to collect data. Data was analyzed by multiple linear regressions and presented in form of frequency tables and charts and proper inferences made towards the same. The study found out that performance of real estate sector in Nairobi County, Kenya was significantly affected by mortgage financing which was statistically significant with a p value of 0.001.The relationship between venture capital financing and performance of real estate sector in Nairobi County, Kenya was positive, however, the relationship was statistically insignificant with a p value of 0.526.The study also found out that even though the relationship between equity financing and performance of real estate sector in Nairobi County, Kenya was positive, the relationship was statistically insignificant with a p value of 0.472. The study concluded that performance of real estate sector in Nairobi County, Kenya was significantly affected by mortgage financing which was statistically significant. The study also concluded that venture capital financing insignificantly influenced performance of real estate sector in Nairobi County, Kenya. The study further concluded that the relationship between equity financing and performance of real estate sector in Nairobi County, Kenya was statistically insignificant. The research recommends that in order for the investors to maximize returns on their real estate investments, they should adopt strategies such as increasing mortgage financing up to an optimal point since it has the highest returns as compared to other financing sources. The research further recommends that to reduce risks associated with venture capital financing, investors should undertake some mitigation steps like assessing and evaluating potential investment targets regarding risk and return. Similarly, the research recommends that real estate companies should consider raising equity through private placements as opposed to public placements.