Chinese real estate developers in Kenya are increasingly turning to local banks for project financing, a notable shift from their traditional reliance on funding from Chinese state-owned institutions like the China Exim Bank. This strategic pivot, driven by rising capital needs, regulatory changes, and a desire for more predictable domestic funding, is reshaping the financial landscape of Kenya's multi-billion shilling property market.

The move was highlighted at a recent networking dinner in Nairobi convened by the Chinese Developers Association in Kenya, where industry leaders met with local financial institutions to discuss deeper collaboration. Zhirui Liu, Vice President of the association, stated that as Chinese developers expand their footprint in Kenya, local financial institutions have become crucial partners for navigating land acquisition, project funding, and international transactions. "Over the years, Chinese developers have become an important part of Kenya's real estate landscape," Liu said on Wednesday, November 26, 2025. "Throughout this journey, they need a trusted partner, offering timely and professional support."

This sentiment was echoed by representatives from Equity Bank Kenya, who noted a heightened demand for structured project financing and comprehensive support services. "Our focus is to provide seamless project support, from land acquisition and construction finance to end-buyer mortgages and scheme financing," said Moses Nyabanda, Equity Bank Kenya's Managing Director. Developers are also seeking broader risk coverage, including insurance for fire, work injury benefits, and goods-in-transit to ensure project continuity.

Implications for Kenya's Financial Sector

This trend presents a significant opportunity for Kenyan banks to grow their loan books and diversify their portfolios. Chinese firms have been instrumental in transforming Kenya's skyline, moving from constructing major infrastructure projects like the Standard Gauge Railway and the Nairobi Expressway to developing large-scale residential and commercial properties. Companies such as Erdemann Property Ltd, known for the Great Wall Apartments, and Henbon, developer of Diamond Bay Suites, have established a major presence. The scale of these projects, which have expanded from small residential blocks to large mixed-use communities, requires substantial and sustained capital injection that local banks are now being tapped to provide.

However, this shift also carries potential risks. The Kenyan real estate sector has seen a rise in non-performing loans (NPLs) in recent years. Data from the Central Bank of Kenya (CBK) has previously shown an increase in loan defaults within the sector, attributed to a challenging business environment. While the market is stabilizing, local banks will need to employ enhanced credit appraisal standards to mitigate the risks associated with large-scale construction financing.

Drivers of the Financial Shift

Several factors are compelling this move towards localization of funds. Globally, there is a tightening of capital flows, and Beijing has reportedly started to move away from the scale of large infrastructure investments seen in previous years. This makes domestic financing a more stable and accessible option for developers operating in Kenya. Furthermore, as Chinese firms become more embedded in the local market, they face challenges such as complex land acquisition processes and evolving compliance requirements, which local banking partners are better positioned to help navigate.

The collaboration is not a one-way street. Developers at the recent forum called for faster financing turnaround times, tailored mortgage products for middle-income buyers, and enhanced cross-border banking services for firms operating between Kenya and China. This feedback is expected to shape how local banks tailor their financial products for this growing client base.

Broader Economic Context

The increasing partnership between Chinese developers and Kenyan banks reflects the maturing of China-Kenya economic relations. Initially defined by large, state-funded infrastructure projects under the Belt and Road Initiative, the relationship is evolving to include more private sector integration and local partnerships. This pivot is also happening as Kenya's real estate market itself evolves, with a growing emphasis on affordable housing and the development of satellite towns around major urban centers.

Chinese contractors have been credited with boosting Kenya's housing supply, introducing new construction technologies, and creating jobs. The formation of the Chinese Property Developers Association in Kenya in January 2024 was a move to standardize practices and ensure quality. As these developers increasingly rely on local financing, it is likely to foster deeper integration with the Kenyan economy, potentially leading to more localized supply chains and increased opportunities for local skilled labor. This symbiotic relationship, if managed prudently by financial institutions, could be a significant driver for the next phase of growth in Kenya's property market.