THE SUSTAINABLE HOUSING FINANCE SUB-SECTOR; A PANACEA FOR ECONOMIC AND SOCIAL BENEFITS IN NIGERIA

Abstract

This study assessed the effects of sustainable housing finance sub-sector on economic and social development in Nigeria. This was done with emphasis on selected house construction density neighbourhood and institutions responsible for housing construction in Enugu State. Such housing construction density nieghbourhood includes; Ugwuaji Awkunanaw, Emene Nike, Ibagwa Nike Amaokpo Nike, Ugwuomu Nike,
Akagbeugwu and Agbani nieghbourhood. Some registered professionals in house construction investigated are engineers, Architects, real estate developers, registered surveyors and builders to ascertain the extent of their involvements in sustainable housing finance for economic and social development in Enugu State. The specific objectives of this study were to (1) Determine the effects of Public- Private Partnership (PPP) on sustainable housing finance sub-sector. (2) Examine the affordability challenges on sustainable housing finance sub-sector and (3) ascertain how the involvement of professionals in the building construction industry impacted on sustainable housing finance sub-sector in Nigeria. Stratified random sampling technique was adoption to select staff and registered professionals in housing construction density neighbourhood in Enugu indispensable factor in the housing delivery system. This is because only a very few in most nations can afford to pay cash for a house (Agbola, 1998).  Most other people must have to finance their house through loans, personal savings, assistance from relatives or friends and gifts. Majority of Nigerians fall into this latter category of informal housing finance. This housing finance system is prevalent among the low-income citizens, who relied on their meager savings, borrowing from friends and family members, gifts and sometimes from cooperative societies to erect their buildings.
Rust, (2012) observes that the growth and performance of the housing sector and the role of housing finance is critical to the development finance agenda for at least three reasons.
First, housing is a very rapidly growing subsector of the economy and over time will represent a substantial portion of GDP. Central to the real economy, the production and consumption of housing stimulates economic growth. Growing property markets and the finance that drives them will also have a dramatic impact on the structure and performance of national and regional economies (McBride, 2012).
Second, the housing and housing finance sectors have a range of hidden multipliers that are particularly useful for developing economies. Housing assets, whether geared with finance or not, can act as a financial springboard to micro and medium enterprise and human capital development. It can also contribute to the realization of sustainable livelihoods. Housing can achieve a range of broader development goals, and so can operate as a beacon for other objectives (FinMark Trust, 2012). Third, as the middle class across Africa grows, housing finance offers the opportunity to support its stable growth. The impact of home ownership evidence of declining activities in housing finance: the average share of GDP invested in housing declined from 3.6% in the 1970s to less than 1.7% in the 1990s and continued in that trend (FinMark Trust, 2010).
Lack of access to finance affects the supply of housing. Developers in the formal sector are mainly financed by deposit money banks at excessively high interest rates and stringent conditions. Low income individual homebuilders seek finance either from informal sources such as ajo
(traditional thrift societies) or Esusu/Isusu, age / trade groups, traditional moneylenders, friends or family to build their homes. Osamwanyi and Megbolugbe,
(1987), and Nubi,( 2006)  in FinMark Trust, (2010), argued that those classified as microcredit organisations  sources are convenient and accessible. They operate on the basis of third party guarantees and rely on peer pressure to ensure repayments. They are, however, unsecured and hardly accumulate the magnitude of funds required for large-scale impact of individual household developments. In the light of the above, the study tends to investigate the effects of sustainable housing finance sub-sector as a panacea for economic and social benefits in Nigeria.