Housing is one of the basic human needs. This accounts for the value and the attention given to it in all countries of the world. In Nigeria, it is noted as an integral part of every Nigerian‟s dream, thus, high premium is placed on it as a measure of success and economic freedom. Housing is perceived and actually seen as a long term investment that gives a hedge against high inflation. But the nonavailability of public land for housing in order to meet the demand of ever increasing population of the country is building up tremendous pressure on the built environment. High cost of materials; inflation induced decreased purchasing power and lack of public and corporate finance in the sector can be considered as the most significant reasons among others. Finance, however, is the major hindrance to effective production or acquisition of affordable housing especially among the low and medium income earners in Nigeria. This paper reviews the trends of housing delivery in Nigeria through the intermediation of mortgage financing system. It discusses the challenges, proffers probable solutions as well as proposes recommendations for strategic repositioning of mortgage institutions for effective housing delivery in Nigeria.
The influence of the financial sector is hardly felt in the building industry in Nigeria. To put it succinctly, housing finance through this sector has been negligible. Lemo (2007) observed that till the year 2007, from the inception of housing finance system in the country, only a paltry sum of about Seventy billion naira (N 70b) which is approximately US$ 58.3m, have so far been injected to the system. This only accounts for less than 0.5% of the Gross Domestic Product (GDP). The unsatisfactory performance of the housing finance system and institutions is linked with the twin problems of accessibility occasioned by underdevelopment of land tenure system coupled with inability of financial systems in providing low cost finance that meets the need of low and medium income group (Mailafia 2007). However, workable policies on housing finance seem to be a long way off the entire polity. Though it could be observed that private participation is being embraced, while Public-Private initiatives are also taking root, in Nigeria, limitations arising from non-availability of public land for public infrastructure, recovery of funds, involvement of professionals in the building industry and cost of building materials have impaired the smooth delivery of many housing policies. Corrupt practices by government officials have hitherto limited the efforts of successive administrations. Mukhtar (2005) puts it clearly that governments lack both administrative and technical manpower to produce public housing in sufficient numbers. Most Nigerians also see mortgage loans from government as part of their share of the „national cake‟. This has handicapped the government to the point of advising prospective home owners to approach commercial banks thus pushing the supposed major player in the sector to the stand of spectators. High interest rate on loans has impeded and scared such prospective home owners from achieving their dream of ever owing a personal building. This study adopts a historical method to analyze the current trends in Housing Finance tracking recent sources. Varying sources were inquired, including formal and non-formal sources. Those which agree with each other are considered. When two sources disagreed, the authors have used their own expertise in the field to justify the statement. There are some points where there is no orthodox evaluation process, the authors used common sense judgment to validate the issue.
Source: BritishJournal Publishing, Inc.
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