PROBLEMS OF FINANCE FOR HOME ACQUISITION BY PRIVATE RESIDENTIAL PROPERTY DEVELOPERS IN BAUCHI METROPOLIS, NIGERIA

Purpose-The purpose of the paper is to examine the problem of finance for home acquisition by private residential property developers in Bauchi metropolis, Nigeria. Design methodology/approach- Two hundred respondents were selected through stratified random sampling. Data were presented using simple percentage distribution tables and Chi-square analyses were used to analyze the data collected for the research. The conditions for accessing credit from the National Housing Trust Fund (NHTF) which is in custody of the Federal Mortgage Bank of Nigeria (FMBN) and private financial institutions are examined. The average monthly incomes of public sector workers was established from two different salary structures which are currently applicable to workers in State and Federal Government establishments. Findings- The findings reveal that low income of the majority of the respondents; poor source finance and difficulty in accessing credit amongst others were discovered to be the major housing finance impediments to residential property development in the study area. The study identified low incomes/wages to be the greatest impediment to credit as workers below Grade Level 07 on the two salary structures could not pay off a loan of N1.5m which is equivalent to cost of 1-bedroom bungalow based on their monthly earnings. Research limitations/implications- In order to make meaningful and adequate coverage, the study is limited to Jos metropolis. It will also be limited to residential properties in the study area. The potential respondents will be the sample size drawn from the population of the study in both Jos North and Jos South Local Government. Practical implications- The implication of the study is that the current global financial crisis has caused a surge in lending rates which will further affect loan seekers affordability to credit. Lending rates in private financial institutions are on the higher side averaging 23 per cent in addition to other charges while other conditions attached to credit makes it practically impossible for low income earners to meet the requirements. Originality/value- This paper represents the first work that analyse the problem of finance for home acquisition by private residential property developers in Bauchi metropolis, Nigeria. Conclusion- It can be concluded that public sector workers who are currently on the two salary structure employed in the study are low income earners and generally lack affordability for credit. Recommendations- The study recommends for upward review of workers' salaries particularly those on the two salary structures employed for the study to facilitate their access to credit for home acquisition and there is need to simplify the procedure for securing land titles. Financial institutions should scale down on their stringent lending requirements for a building loan.