| dc.description.abstract | Financial institutions play the role of provision of credit facilities to both businesses and
individuals. Empirical evidence has always shown that access to finance even inform of
credit, has a profound effect on access to and affordability of basic, decent commodities.
Such credit facilities include, among others, mortgage loan which is influenced by
interest rate and other macro and micro economic factors. Despite the intervention of the
central bank on the interest rate charged on mortgages by mortgage providers, interest
rate has persistently remained high hindering mortgage uptake. The objective of this
study was to investigate the effect of interest rates on mortgage uptake in financial
institutions in Kenya. This study employed descriptive research design and multiple
regressions analysis. The study covered the period between 2004 and 2013 with a
sample size of 44 firms offering mortgage financing. Secondary quarterly data was
collected from Kenya National Bureau of Statistics and Central Bank of Kenya. The
study findings established a coefficient determinant of 95.1%. Money supply, interest
rate and inflation were found to significantly affect mortgage uptake while GDP was
found to be insignificant. The study concluded that interest rate negatively affects
mortgage uptake and an increase in interest rate will lead to a decrease in mortgage
uptake. The study therefore recommended that government should intervene to monitor
interest rates and maintain it at reasonable levels to enhance mortgage uptake in Kenya. | en_US |
