Joint Venture Financing and Development of Housing Construction Projects in Kilimani Ward, Nairobi County
Abstract:Exponential growth of the urban areas has been brought about by the migration of people flocking into cities in search of better economic opportunities, better healthcare and the promise of a better life. This rapid urbanization has brought pressure on the delivery of affordable housing which is reliant on the various models of housing finance. Mortgage financing and commercial bank institutions have been on the forefront in the provision of financial services to developers for various types of housing developments. However, the housing construction development in Nairobi has been challenged by bureaucratic red tape on the provision of funds by these commercial banking institutions. Delayed disbursement of funds for housing construction due to very stringent conditions based on macro-economic, risk, stakeholder competence and regulatory variables has become a norm and outcome. Joint venture financing is thus becoming a feasible housing finance alternative This study sought to examine the relationship between; the macro-economic factors, risk perceptions, project team competence, legal and regulatory framework, that directly and indirectly influence the adoption of the joint venture financing option towards the development of housing. The research design used in this study was survey research design. Stratified random sampling was used to select the sample size to ensure representativeness. The population size for this study was 1516 stakeholders. Data was collected from 73 respondents from the Kilimani ward using an online based questionnaire. Only 58 respondents provided feedback to the questionnaires. Secondary data was obtained from academic papers, journals and published reports from government agencies. The result was presented using charts, frequencies and percentages. The study recommends that the government enhances the formulation and implementation of feasible and sustainable frameworks; economic, fiscal and land policies that will be all inclusive to the stakeholders of the housing and construction sector. Capacity building by, establishment of training and knowledge centers which will address the generic joint venture issues. The issues include; standardization of joint ventures contracts, determination of ownership structures, control elements of the joint venture, risks mitigation approaches from operational, technical and strategic points, and knowledge sharing of the current building technologies that are more efficient, less costly and faster to build. We can also bring in the industry best practices on what requirements are required when tapping the various competencies of the various team members to ensure that the entire fit is working in synergy.
Keyword: Joint Ventures, Macro-economic Factors, Project Team Competence, Legal and regulatory framework