TITLE:
Conceptualizing the Risk-Performance Nexus in Kenya’s Mortgage-Financed Construction Sector
AUTHORS:
Julius Mungai Muigai, Shadrack Mutungi Simon, Gerryshom Munala, Maina Kiambigi
KEYWORDS:
Construction Project Performance, Finance, Mortgage, Risk
JOURNAL NAME:
Engineering,
Vol.17 No.11,
November
21,
2025
ABSTRACT: Mortgage-Financed Construction Projects in Kenya (MFCPs) have been associated with dismal performance. These projects have been riddled with cost and schedule overruns, among other challenges. This paper aimed to establish the risk factors affecting the performance of MFCPs, their effects, and possible mitigation measures. A desk review approach was adopted whereby previous research published globally between the years 2004 and 2024 on the subject area was considered in the analysis. In total, 58 studies were reviewed. However, data were collected from a total of 23 studies, representing a response rate of 39.7%. Some of the reasons why 35 studies were not considered were due to duplication of findings, lack of a clear method of data collection and analysis, and limited geographical scope, among other reasons. 12 of the selected studies were from Kenya. Based on the reviewed studies, the research established a total of 31 individual factors. These were categorized into six groups, namely: X1-Market Risks, X2-Financial Risks, X3-Planning Risks, X4-Construction Risks, X5-Legal and Regulatory Risks, and X6-Environmental Risks. The four main effects of risks were found to be cost overruns, project delays, reduced profitability, and increased loan default risk. Some of the risk mitigation measures established included pre-construction due diligence, strict contract management, regular progress monitoring, contingency planning, and adequate insurance coverage. The paper concluded that the investigated risks were detrimental to the success of MFCPs and recommended an empirical study to be conducted in Kenya to evaluate the prevalence and effect on the performance of MFCPs, and the methods being used to mitigate them.