Kenya Property Markets Scorecard

Property rights are among the most fundamental principles enshrined in Article 17 of the United Nations’ Universal Declaration of Human Rights and constitutionally protected in most states. Despite this worldwide legal recognition of the importance of property rights to building peaceful, democratic, and prosperous societies, access to and protection of property rights vary greatly in practice. What is more, in many countries understanding of property rights often remains limited to property titles, without deeper appreciation of the underlying and interconnected institutions that make property rights meaningful and allow property markets to function.

The International Property Markets Scorecard is a tool jointly developed by the Center for International Private Enterprise (CIPE) and the International Real Property Foundation (IRPF) in order to map the institutional components of property markets and evaluate their effectiveness. The Scorecard provides a methodology for property market system analysis to investigate the six core elements necessary for sustainable property market development – property rights laws and enforcement, access to credit by small businesses, efficiency of governance, rational dispute resolution, financial transparency, and appropriate regulations.

This approach not only illustrates the linkages between property market elements but also helps identify gaps where some of those important institutions remain weak, either due to the lack of a proper legal and regulatory framework or its weak implementation. Such gaps represent key areas that countries should prioritize when considering reforms to strengthen institutions that support healthy and inclusive property markets.

In Kenya, CIPE and the Institute of Economic Affairs (IEA) have been working together to use the Scorecard methodology to examine the strength of urban, commercial property markets in two major cities and highlight barriers that small businesses face, with the particular focus on property rights and access to credit by small businesses. Similar efforts by CIPE and local partners are also taking place in Armenia, China, the Philippines, and Russia.

The Scorecard consists of two major levels of inquiry – desktop or secondary research and field assessments of actual property market conditions. Desk research is conducted using established indexes from multilateral development agencies such as the World Bank and the World Economic Forum as well as other publicly available sources. To maintain consistency and comparability the desk research remains consistent across each country. Given the unique character and background of each country, field assessments are more flexible.

IEA tailored the fieldwork in Kenya through a mix of focus groups and interviews to obtain the most accurate snapshot of the conditions entrepreneurs face in dealing with the government, banks, and professional services providers in the property sector. Although necessarily subjective, these views from small businesses have a unique power to illustrate key problem areas in property markets precisely because of the real, personal experiences they reflect. The result presented here is a report that explains and supplements the Scorecard findings, and provides reform recommendations.

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