Importance Of Housing Finance

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such a venture hence the need for loans, though the repayment period is long term. (http//finance urban housing.mht) Many African countries despite having recognized the economic and social importance of housing finance, it often remains undeveloped. The low levels of lending reflected depict that small numbers of individuals can afford it due to the high cost of housing compared to the income earned. (UN habitat, 2003) Therefore the role that a financial system plays in an economy is to channel resources from those with surplus to those with deficit. By so doing, there is accumulation of investment, capital growth and economic development. (Carmichael and polmeleano, 2001) 2.6 A GOOD HOUSING FINANCE SYSTEM 2.6.1 DELIVERY AND RECIEVING MECHANISM…show more content…
The mobilization of funds is crucial to the enablement of housing finance. Choquill (1999) further argues that the success or failure of an enabling approach is largely dependent on the extent finances are generated from the informal to the informal sources.In Nigeria for instance the housing finance situation is clear as is described in their housing policy as severely under developed and ill equipped to mobilize and channel to the housing sector. It is therefore advisable that a country should have more than one housing finance scheme in order to mobilize the maximum amount of funds dedicated to housing. Each system assumes a certain function within the market so that the systems complement each as well as satisfy people’s basic desires of home ownership.…show more content…
INSTITUTIONAL INVESTORS: these play a very important role in the provision of funds either for investment or asset diversification. These can be in the form of pension funds, insurance companies, local authorities or private companies should be noted that though these institutions may have colossal sums of money under their control, these funds belong to their clients. They hold the money in trust and must remain liquid enough to meet their clients demand when they fall due. Their main motivation in investing in real estate or building societies will be for a reasonable return and to some extent, the realization that their own form part of the queue for housing finance at building

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