This research thesis aims at establishing the profitability of financing low-cost housing by formal financial institutions in Kenya and the existing financing mechanisms for the low-income housing segment through which they can help eradicate the growth of slums (informal settlements) in Kenya. The research study covers financial institutions in Kenya and also takes into account the coordination between the government and UNHABITAT in their mission to eradicate the growing slums in Kenya. The study also provides more knowledge and information to members of staff of informal financing agencies who do the work that the formal financial institutions have not been able to do effectively.

The study seeks to identify solutions for the stakeholders in the sector to ways in which they can provide their services in a more cost-effective and efficient manner and be able to gain profitably from this endeavor. The study will also investigate the risks involved in investing in low-income housing. Research data shall be collected by using qualitative research methods and through that the data will be analyzed to be able to depict the market situation in Kenya. This result is expected to be used by the financial institutions to make crucial decisions on the profitability of financing low-cost housing and to be part of the initiative to eradicate the slums in Kenya and mainly in the urban centers.