SMEP Microfinance Bank, AMFI-K, and Habitat for Humanity Co-Create Affordable Housing Loan Product
In a bold and inspiring step towards transforming housing finance for low- and middle-income Kenyans, the Association of Microfinance Institutions Kenya (AMFI-K), in partnership with Habitat for Humanity, recently held a dynamic co-creation workshop with SMEP Microfinance Bank in Naivasha. Held at Panorama Park Hotel, the three-day workshop focused on designing a Housing Microfinance (HMF) product tailored to support incremental home improvements for families typically excluded from traditional mortgage systems.
The partnership is anchored in a shared vision to deliver accessible, flexible, and dignified housing solutions to underserved communities. The focus was on Housing Microfinance (HMF), which is a unique, flexible form of financing that empowers families to build, improve, or expand their homes in a step-by-step manner. It’s not a consumer loan, mortgage, or productive loan; it’s a transformative tool for people who need decent, dignified housing without the burden of sizeable lump-sum credit.
The co-creation approach was deeply participatory, involving experts in microfinance, housing, and product development led by Microsave Consulting. Using the 8 Ps and 8 Cs of product design covering areas such as product fit for low-income earners, pricing that reflects affordability and sustainability, processes that are simple and transparent, promotion and communication strategies, partnerships, performance metrics to track impact and success, and customer care, the team developed a well-rounded, human-centered product prototype. The workshop also addressed how the product would be communicated, delivered, and supported, ensuring clarity in operations, alignment with client values, and integration of essential themes like gender inclusion, environmental sustainability, and digital access.
Participants discussed flexible delivery models, incorporated client training needs, and identified key drivers for client satisfaction and institutional performance. One of the standout elements of the workshop was the validation process with clients in Machakos. SMEP gathered feedback from clergy members, individual clients, and group borrowers, many of whom shared heartfelt stories about their current housing challenges. Pastors who are low-income earners expressed a need for housing that reflects the dignity of their work. Many lack formal employment records or bank accounts, which makes accessing financing difficult. Yet their need for secure, decent housing is urgent. In one testimony,
“We preach every Sunday in suits, but at home, we lack dignity in our living spaces. This loan could change that,” shared Pastor Luka.
Others highlighted the risks their families face in the event of sudden loss, emphasizing that decent housing is not just about shelter but legacy. Clients appreciated SMEP’s focus on shelter, a first in its history. There were also calls to expand the product to cover land purchase, fencing, perimeter walls, and building homes for elderly parents. Group clients, some of whom have been with SMEP for over two decades, were encouraged by the bank’s new focus on shelter financing. They recommended that the product be expanded to include land acquisition, fencing, and building features like gates and perimeter walls. Individual clients, especially those who are unmarried or supporting elderly parents, asked for flexibility in using the loan to build homes for extended family.
The product under development is more than just a loan; it is a holistic solution that includes housing support services, access to information through guides and flyers, and connections to qualified artisans and suppliers. It’s designed to be simple to access, transparent in pricing, and inclusive of emerging needs like climate-conscious construction and water, sanitation, and hygiene (WASH) integration.
As a next step, SMEP will begin piloting the housing microfinance product. The rollout will be supported by community outreach, digital platforms, and continuous learning from clients in the field. The institution aims to increase customer satisfaction, scale outreach to new and existing clients, and build a sustainable housing finance portfolio that strengthens community resilience and institutional performance.
