A Moderator or Predictor? The Role of Risks in Kenya’s Mortgage-financed Construction Projects

Abstract

Mortgage-financed construction projects (MFCPs) are important to housing delivery in Kenya, but they remain exposed to risks that can affect cost, time, quality, safety and cash flow. This study examined the role of risks in the relationship between critical success factors (CSFs) and the performance of MFCPs. A survey research design was adopted, targeting 1,063 mortgage-financed projects initiated during the 2021/2022 financial year. Data were collected from 122 respondents through structured questionnaires administered to site agents and clerks of works, and were analysed using descriptive statistics, ANOVA and multiple regression analysis. The findings show that project performance is influenced by several CSFs, with project management-related factors, consultant-related factors and project-related factors ranked highest. The risk assessment identified construction risks as the leading risk category, followed closely by financial and planning risks. Regression results indicated that the model explained 37.4% of the variance in project performance. The aggregate interaction term between risks and CSFs was not statistically significant, suggesting that risks did not function as a moderator in this sample. However, risks had a statistically significant negative direct effect on project performance. The study concludes that improving MFCP outcomes requires integrating strong project management, competent professional input and proactive risk management across project planning, financing and implementation.