ASSESSMENT OF MORTGAGE INSTITUTION IN FACILITATING AFFORDABLE HOUSING THROUGH PUBLIC PRIVATE PARTNERSHIP

1.1 Introduction

Mortgage from its origin refer to a deed pledge. The dead portion of a mortgage entails that, the pledge dies as soon as the loan taken is repaid and that property which serves as collateral in the transaction was dead or forfeited, if the loan was not repaid by the person to whom the loan was granted. Mortgage Institution has over the years increase access to housing in many countries of the world especially in the developed countries by the citizens with low and medium incomes as the major beneficiaries. However, there is still inadequate acceptance of the mortgage system and there exist low penetration (WBG, 2016).

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.

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1.2 Background of Study

The public-private partnership for housing delivery under Nigeria's current housing policy (Abdulsalam, 2008) confers certain identifiable roles on both the public and the private sector. The roles of the private sector in housing financing, delivery and maintenance with particular reference to private partnership includes responsible for production of physical houses, responsible for primary mortgage lending, required to invest mortgage securities and responsible for the production and supply of building materials, particularly local content.

The housing sector plays a more critical role in a nation's welfare than is always recognized, as it directly affects not only the citizenry, but also the performance of other sectors of the economy. Adequate housing provision has since the early 1970s consequently engaged the attention of most countries, especially the developing nations for a number of reasons. First, it is one of the three most important basic needs of mankind- the others being food and clothing. Secondly, housing is a very important durable consumer item, which impacts positively on productivity, as decent housing significantly increases worker's health and wellbeing, and consequently growth. Thirdly, it is one of the indices for measuring the standard of living of people across societies (Sanusi, 2003).

Propelled by the patriotic quest of addressing Nigeria's acute housing problem, the Federal Government came up with a National Policy on Housing and Urban Development in 2002. The policy has since then triggered milestone reforms in the nation's housing industry aimed at repositioning it for efficient and effective housing delivery and maintenance. One of the means through which the policy is been achieved is on public-private partnership concept. The thrust of the policy is to raise the home ownership rate among Nigerians to a respectable level by moving the housing industry to sustainably deliver mass, decent and affordable housing with the active participation of the private sector-driven mortgage based housing delivery and maintenance system (Oduwaye, 2004). The policy believes that this will particularly address the housing problem of most Nigerian citizens.

The concept of private partnership in housing financing, delivery and maintenance system is predicated on the pooling together of resources from the various stakeholders, each party making inputs, thereby minimizing wastage and maximizing results achieved. Ikekpeazu (2004) stressed that the expediency of the increased adoption of the public-private partnership for housing financing and delivery in the present socio-economic circumstances of shortage of housing in Nigeria is now even more glaring than ever. With the increasing demand of the population on the national economy and the government's propensity for enlarging the multi-sectorial allocations in terms of finance, it is becoming obvious that government alone can no longer provide adequate housing for all categories of her citizens particularly the low income earners.

The organized private sector comprise of members of the real estate developers association of Nigeria and some commercial banks that have real estate departments. Average citizens including the low-income earners do not easily have access to housing finance because of their low wages. Nigeria is a country with high unequal income distribution, a situation that restricts the reach of the vast majority in the acquisition of quality housing. This study examines the role of public-private partnership in housing finance, delivery and maintenance in Nigeria.

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1.3 Statement of Problems

Housing finance constitutes one of the major pillars of housing delivery and maintenance system. Indeed, without a well-organized and efficient housing finance mechanism, the goal of a housing development and maintenance policy will be largely unattainable. Housing finance has been recognized as an important, almost indispensable factor in the housing delivery and maintenance system. This is because only the very few in any nation can afford to pay cash for a house or pay cash for a major renovation of the house. Most other people must have to finance their house building and maintenance through loans, personal savings, assistance from relatives or friends and gifts. Introduction of public-private partnership in housing delivery and maintenance is to enhance the productivity of the housing sector, increase housing affordability and improve access to basic infrastructure and social services.

Nwuba et. al. (2015) opined that, household income, savings, construction period, and education level are the major determinants of housing affordability in Nigeria’s urban housing markets. Yang and Wang (2011) state that, in their research on the privatization of public housing problem as it relates to housing affordability hinged on household family structure, educational attainment and employment status.

Ikekpeazu (2004) stressed that in order to attain the desired outcome for private partnership, the perception of the housing sector as a vast arena of social problems and a drain on the economy must change. Housing must be seen as an important economic sector with crucial linkages to the overall economy of a nation. The housing sector is a key component of the economy. It is typically the largest single form of fixed capital investment, in most economics. Based on these facts, the researcher seeks to examine the role of private partnership in house finance, delivery and maintenance in Nigeria.

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1.4 Aim and Objectives of Study

The aim of the study is to assess the Mortgage Institution in Facilitating Affordable Housing through Public Private Partnership in FCT, Abuja. In achieving this aim, the following specific objectives were laid out as follows:

1. To examine the role of private partnership in house finance, delivery and maintenance in FCT, Abuja.
2. To ascertain the level of investment in housing delivery and maintenance in FCT, Abuja.
3. To identify the problems of housing finance, delivery and maintenance in FCT, Abuja.
4. To identify the contribution of Mortgage Institution in Facilitating Affordable Housing in facilitating affordable housing through Public Private Partnership in FCT, Abuja.

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1.5 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

• What is the role of private partnership in house finance, delivery and maintenance in FCT, Abuja?
• What is the level of investment in housing delivery and maintenance in FCT, Abuja?
• What are the problems of housing finance, delivery and maintenance in FCT, Abuja?
• To what extent does the Mortgage Institution contribution facilitate Affordable Housing through Public Private Partnership in FCT, Abuja?

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1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

Hypothesis One

• H0: Public-Private partnership has not contributed to housing finance, delivery and maintenance in Nigeria.
• H1: Public-Private partnership has contributed to housing finance, delivery and maintenance in Nigeria.

Hypothesis Two

• H0: There is no significant relationship between mortgage finance accessibility and housing affordability on Public Private Partnership Housing Provision
• H1: There is a significant relationship between mortgage finance accessibility and housing affordability on Public Private Partnership Housing Provision

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1.7 Significance of Study

The following are the significance of this study:

1. The results of this study will educate the general public on the role of public private partnership and how it can be used as the instrument of development in housing finance, delivery and maintenance.
2. The findings will sensitize the stakeholders in building construction and real estate management on the need for effective collaboration with the private sector to ensure speedy financing and delivery of housing units all over the country noting that private partnership has facilitated development in housing delivery and maintenance in other advanced countries of the world.
3. This research will also serve as a resource base to other scholars and researchers interested in carrying out further research in this field subsequently, if applied will go to an extent to provide new explanation to the topic.

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1.8 Scope of Study

The study focuses on the Assessment of Mortgage Institution in Facilitating Affordable Housing through Public Private Partnership in FCT, Abuja.

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1.9 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Research material: availability of research material is a major setback to the scope of the study.
3. Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
4. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).