Problems Mitigating Housing Finance Through Primary Mortgage Institutions In Lagos

Abstract

In developing countries among important factors influencing housing provision, finance is one of the most critical.  This is the case with Nigeria and in particular in large urban centres of which Lagos is one. The study is therefore an investigation on the structure and challenges confronting housing finance efforts of Primary Mortgage Institutions in Lagos.  The research objectives include the examination of housing delivery policies and finance in Nigeria and Lagos.  The study also examines the structure of Primary Mortgage Institutions (PMIs) in the study area, housing funding products and strategies by the PMIs and investigated the problems and challenges confronting the operations of the PMIs in Lagos.  The methodology employed by the research includes the collection of primary and secondary data.  Field survey showed that 65 PMIs operate and are active as at the time of field work and 16 representing 25% were picked for sampling through oral discussion and questionnaire administration to the bank officials and customers, with 160 questionnaires for the latter. Data obtained were analyzed through simple frequency distribution tables and bar charts.  Among major findings of the research include the following: that the PMIs nature of business transactions include commercial banking, LPO financing, merchandising, property agency and sales and transport.  Existing departments in the PMIs are corporate/administration, human resources operations, legal, marketing and mortgage. Services and products of the PMIs are National Housing Fund (NHF) loan, estate development loan, pension-linked loan, LPO financing and overdraft facilities for their customers.  Major challenges confronting the operations of the PMIs are NHF policy, structure of PMIs, the national economic climate, high cost of building materials and public apathy, difficulty of access to land and land documentation constraints, poor collateral, high interest rates and competitive finance market.  The study suggests that the NHF policy should be reviewed and that government should provide incentives such as tax rebate for building materials manufacture, encourage the re-training of labour to improve their skills and speed.  The Nigerian land law should be reviewed to make access to land less cumbersome while cheap funding sources should be provided specifically for housing finance.
Key words: Housing; Institution; Finance; Mortgage; Bank; Policy