A half-built house in Njiru near where I am staying

The growing Eastlands of Nairobi is dotted with half-built houses. As you walk through the brick/cement/stone structures so typical of the developing world, you will see neighborhoods where perhaps 3 out of every 4 houses is roofless and vacant. The doors and windows will be piled up with loose rocks, to discourage squatting. One of my hosts explained that Nairobians build as they have money. So the building process is lenghtly and at times unpredictable.

This was another of those visual reminders of the importance of credit in a healthy economy.

The United States is coming off triggering a massive global recession for the opposite reason: the excess of credit. Multitudes of homeowners were sold mortgages they had no business receiving, without having to prove adequate income.

The density of population here is staggering. And unlike the dense urban centers in the US like New York, there is vastly inadequate infrastructure. That last sentence just doesn’t convey how utterly overburdened Nairobi is, like a bicycle carrying 40 mattresses. Fred Afwai, our Kenyan Country director, explained that the city planning for Nairobi was for 200,000 people. Think Boulder, Colorado. The current population is somewhere close to 5 million. Think the entire population of Colorado.

Bank accounts and loans are only available to those who already have money. To open an account is costly, and simply out of reach of our friends here in the eastern, poorer part of the city. This means that overcrowded population centers in Nairobi will remain crowded while half-built houses remain empty.

This is article one of a two-part series on credit in Kenya