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Affordable Housing: How to unlock funding

Tuesday January 14 2020

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Affordable housing is one of President Uhuru Kenyatta’s Big 4 Agenda. His target of building half a million housing units by 2022 is quite ambitious - even if funds were sufficient.

It’s an open secret that our current financial situation is quiet stressed as we begin to service the big infrastructure loans we took during the first Jubilee administration.

As a country, we are indeed cash-strapped as evidenced by various looming strikes by lecturers, teachers, doctors and pilots demanding their fair share of the national budget.

One easy, perhaps lazy, approach is of course to get another international loan to pay off the old ones. What economists like to frame as filling one hole, by digging another bigger one.

The other option that the government tried but got quiet some lashing and pulled back was when they tried to raise capital by introducing a housing levy on all salaried employees.

The messaging around it was horribly executed. For instance, the Permanent Secretary for Housing said on live television that whereas all employees would be contributing, only a few would get a house – based on some random algorithm.

So what next? Should the government give up and move on to less ambitious projects?


However, before they surrender, there is one more thing they could try. Its called Real Estate Tokenisation.

This is simply translating an asset into some cryptographically protected digital asset. The word cryptographic is crucial since we do have many digital assets that are not cryptographically protected.


Indeed government has over the last two years experimented with digital assets with some limited success. One best example is the M-Akiba investment product.

M-Akiba allows any Kenyan to buy and sell government treasury bonds using her mobile phone with as little as Sh3000.

Essentially, government managed to broaden the number and type of investors who could participate in their fund raising activities. Whereas the number of participants and the amount raised remains below expectation, M-Akiba has broken new ground and proven the concept of digital assets.

Using a mobile interface and mobile money one can log in and pay for the digital asset and get returns of about 10 percent per annum without ever going through the complications of meeting stock brokers or going to the Nairobi Securities Exchange.

This concept can be technically tweaked and re-purposed to finance the affordable housing project.

The tweaking would require the use of Blockchain-based system to enhance transparency and accountability – hence the need for having cryptographically protected tokens or digital assets.

At a very high level, this would entail identifying or allocating housing projects across the 47 counties. Each county housing project would then be costed and issued with a fixed number of cryptographically signed digital tokens.

As an example, if Bungoma County has been allocated one thousand housing units at the cost of two million shillings each, the total cost for the project would be Sh2 billion.

Government would then issue two million cryptographically protected tokens on sale – each valued at Sh1,000.

Wanjiku can then buy one or several of these ‘securitised’ digital tokens based on her financial capacity and without being coerced. In essence, Wanjiku owns a fraction of the house, rather than the whole house since she cannot raise the total cost of Sh2 million required to own a whole unit.


When the houses are complete and rented out, Wanjiku can earn her fraction rent according to her investment.

To make matters better, Wanjiku can trade off her shares on a digital market as and when she wants. In short, one can opt-out rather than be tied to an asset she may no longer need. Of course she equally has the choice to increase her digital shares.

This level of flexibility and the possibility of opening up the whole market to the outside world can easily mop in financial resources that remain untapped due to the lack of trust that the current government systems have.

Funding is available, lets tokenise our systems and harness it.

Mr Walubengo is a lecturer at Multimedia University of Kenya, Faculty of Computing and IT.

Email: [email protected], Twitter: @Jwalu