Owoeye, AB
2019,
The Nigerian mortgage market : an empirical investigation of associated constraints
, PhD thesis, University of Salford Manchester.
Abstract
This study provided a robust examination of the Nigerian mortgage finance market with emphasises on demand for mortgage finance and supply of fund for mortgage finance. The research focused on the empirical determination of associated constraints limiting the development of the mortgage market.
The study examined existing literature on the demand for mortgage finance to shape and identify the determinants and limiting factors militating against the development of the mortgage market in Nigeria. The research used household level dataset which contain household information such as consumption level, mortgage and financial information. The research found out that demand for mortgage finance is determined by household income, family size, educational qualification, age, marital status, geographical differences, location, infrastructural facilities, number of rooms etc. The consumption pattern of age-group on the demand for mortgage finance in Nigeria further revealed that there is different consumption pattern between the age-groups in Nigeria. This research evidenced it that household income, family size, educational attainment, age, marital status, geographical difference, location, infrastructural facilities, number of rooms are determinants for the demand for mortgage finance across the age-groups in Nigeria. Based on the findings, it suggests that household’s access to mortgage finance will be influenced by the above determinants.
The impact of rationing by financial institutions particularly banks on the demand for mortgage finance on the Nigeria households was investigated. This research evidenced rationing ceased after the bank recapitalization exercise of 2005 but in 2006-2007 due to bad management, global financial crisis, poor ethical and professionalism, poor corporate governance policies, mismanagement of funds and inexperience staffs, rationing returned. This finding suggests that rationing in the Nigeria mortgage market still exist.
This research further investigated the roles of financial institutions particularly banks’ ability to grant of long-term credit (mortgage finance), which is central to the development and effectiveness of any mortgage market. The research used annual dataset from 1981-2017 from Central Bank of Nigeria, World bank etc. The research found out that bank specific factors, macroeconomic situations, industry factors and the institutional issues influence the ability of bank to grant the long-term funds needed in the mortgage market. This research finding suggest that a developed financial market in Nigeria which can provided the needed mortgage finance requires a robust macroeconomy, vibrate banks and a strong institutional structure.
This research investigated the perception of the senior bankers and loan managers on the problems of the mortgage market. A self-structured questionnaire was distributed online. This provided a qualitative perspective to this research. The research found out that the perceptions of the senior bankers and loan managers aligns with the quantitative side of this research. This research evidenced it that policy and regulatory challenges, housing challenges, macroeconomics challenges, institutional challenges, and financial challenges are the factors affecting the development of the mortgage market. Furthermore, data collected from the section provided a robustness check to the research and thus, it found confirmed the findings from the part of the research.
This research provides policy makers and analysts with the tools, which can be used to overcome the identified constraints.
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