Kenya is to start a credit guarantee scheme to enable the self-employed and informal sector workers access loans, including for buying homes.

President Uhuru Kenyatta said on Tuesday that Treasury was working with development partners to start the scheme that is targeting credit worthy borrowers who do not have a "formal salary" or regular income.

"The scheme will include a housing guarantee mechanism for those with low incomes or employed in the informal sector to help expand access to housing finance," President Kenyatta said at the launch of the Kenya Mortgage Refinance Company (KMRC).

The company is one of the avenues the government hopes will enhance access to affordable housing, one of President Kenyatta's legacy projects dubbed the Big Four.

The others are universal healthcare, manufacturing and food security.

Kenya is facing a housing crisis as new units have not kept pace with demand, especially in the middle and lower market segments, driven by population growth.

KMRC is a public-private venture that hopes to help developers free their capital quicker for refinancing building of new housing units.

The acting chief executive of the company Johnstone Oletetia was quoted by Reuters saying the company would seek to raise $50 million from the capital markets in a year or two.

"Maybe the first bond will potentially be a medium term note of about five billion shillings which will be drawn over time," Mr Oletetia said.

Owned by banks and Savings and Credit Societies (Saccos), it will offer medium and long-term finance at fixed interest rates to primary borrowers (developers).

These benefits are expected to be passed on to home buyers.

At the end of 2017, the mortgage stock in Kenya was Ksh223 billion ($2.23 billion), equivalent to 2.74 per cent of GDP.

In South Africa, the outstanding mortgage stock is close to a third of the economy at 31 per cent.

"Housing mortgage finance in Kenya remains below its potential. The major inhibiting factors include lack of access to long-term finance, high interest rates on mortgages, high cost of houses, high incidental cost of mortgages, low levels of income and difficulties with property registration and titling," President Kenyatta said.

The World Bank and the African Development Bank have committed $250 million and $100 million, respectively, to KMRC.

The government targets to increase the number of mortgages from 26,000 currently to 60,000 by 2022.

The housing deficit in Kenya is two million units and grows by 200,000 units each year. The government had promised to build 500,000 units by 2022.

A government official said earlier in the week that the government's social and affordable housing agenda had attracted $30 billion in investments, a half above the $20 billion targeted.

The government is also targeting to raise $500 million annually for housing by charging workers 1.5 per cent of their salaries up to a maximum of $50 per month.

The controversial plan has been halted by the courts.