Key Constraints to Housing Development Finance in Nigeria.

2347 Words10 Pages
Key Constraints to Housing Development Finance in Nigeria.

A TERM PAPER

DEPARTMENT OF ESTATE MANAGEMENT AND VALUATION
SCHOOL OF ENVIRONMENTAL STUDIES; FEDERAL POLYTECHNIC, NASARAWA, NASARAWA STATE e-mail: fpnas@yahoo.com, Tel.: +234 – 047-66701, 66707 047 – 66238 (DL)

JULY, 2012

BY
UZOKWE, LAWRENCE CHIDI
Department of Estate Management and Valuation
School of Environmental Studies
The Federal Polytechnic Nasarawa,
Nasarawa State.
Email: Uzokwe_Lawrence@Yahoo.Com, 08059128950

ABSTRACT
The focus of this study is to examine the problems that are associated with housing development finance in Nigeria. The study attempts to explore the various sources of finance that are available for real property development with a view to
…show more content…
There are various sources through which the developer can get fund to finance real estate development.
2.2.1. Equity Capital
This is the fund realized from personal savings and family savings. It is usually low because of low per capital income, unequal distribution of income and high population in each family unit resulting in excessive consumption, low savings and low investment in Nigeria.
Since this equity capital is usually small, it is prudent for him to decide on a mixture of equity and debt capital which will not only guarantee the highest expected return but also not impair the viability of the development. A developer’s
Ability to borrow will be enhanced by the size of equity capital at his disposal.
2.2.2. Direct Loans
These are the loans got directly from the various lenders such as banks and other financial institutions for a specific period. They are classified according to their duration, short, medium and long terms.

(a) Short Term Loans
The conventional method of raising funds for the acquisition of land and the subsequent development of potential investment property over a two to three year period is by way of short-term finance. The traditional sources of short-term finance are the commercial and merchant banks as well as finance houses. The terms on which these loans are provided are usually very stringent and the interests charged are usually on
Get Access