Friday, October 17, 2014

home loans for System D!

Now here's a great thought: home mortgages for the vast numbers of people in System D. Caroline Wangui Kariuki, managing director of The Mortgage Company in Kenya, made the suggestion in an interview with the women's section of Standard Digital. Money quote:

“The pay slip and its contents determine if you will own a house or not. That is very unfair to the millions in the informal sector with fluctuating earnings. There must be a way of harnessing their earnings through a mortgage tailored to their circumstances,” she says.

According to Caroline, the Government as well as financial institutions fear the risks associated with this group, especially because cannot be assessed in terms of along term income.

This, she says, is a shallow way of looking at this category. There are precedents showing how the micro- finance sector has harnessed the small earnings in the informal sector to boost their financial base.

“If banks such as Equity have found ways of assessing the risks associated with banking the informal sector, surely they can come up with ingenious ways of financing the home market using the same principles,” she says.

Exactly! And not just in Kenya. All over the world. The global majority works off the books. Banks are more than willing to take their deposits but won't give them loans.

Suggestion to System D workers: don't put your money in a bank that won't work with you.

1 comment:

Hilary said...


I'm a graduate student at The Fletcher School of International Affairs and I took a class last semester titled Informal and Underground Finance. In that class we read Stealth of Nations and I found it extremely enlightening.

I'm also a web editor for The Fletcher Forum (the primary student-run academic journal at Fletcher - and I was hoping to find your contact information so I could ask you about possibly writing a short op-ed piece for The Forum.

If you're interested, please send me an email at and I can send you more detailed information.

Thanks so much!

Hilary Eaton