In: Root » Legal and finance » Loans and mortgages
Housing finance in Ghana has had a chequered history following nonconventional methods of informal funding, with sweat equity being the major source. After independence, the government sought to increase the supply of housing by setting up the Bank of Housing and Construction (now defunct) to provide mortgage facilities for prospective homeowners. The State Housing Company and the First Ghana Building Society were also set up to augment the housing problem. However, these institutions have not performed as effectively as was intended. This has led to supply of housing in Ghana achieved mostly by the incremental housing approach, where people put up houses over a long period of time ranging from 3 to 10 years. To fill the gap created by the dysfunction of these state institutions, the government enacted the Home Mortgage Finance Law, 1993 (PNDCL 329), which led to the setting up of the Home Finance Company (HFC, now HFC Bank Ghana Limited). The objective of this company was to provide the service of mortgage finance and also to raise funds for mortgage finance. This was the starting point for the formal mortgage market in the country. This market however, can best be described as an amateur market, accounting for less than 3% the total lending market. With the passage of time, other institutions have ventured into the mortgage market. These institutions include some commercial banks like the Standard Charted Bank and the Societe Generale SSB Bank Ltd (SG-SSB), the Social Security and National Insurance Trust, and the State Insurance Corporation. However, this is on a small scale, and accounts for less than 2% of the total lending markets (Asare and Whitehead, 2006), thus still making the HFC Bank the major provider of mortgage facilities in Ghana. The type of mortgage products provided in Ghana differ from institution to institution but generally include; Home Purchase Mortgage (HPM), Home Improvement Mortgage (HIM), Home Completion Mortgage (HCM) and Home Equity Mortgage (HEM). However, the HFC Bank has an additional product of Buy (land), Build & Own a Home. Thus, although a number of financial institutions have been set up, their combined impact on housing delivery has been limited and they have Even in the best of times, these institutions could only finance a small fraction of the housing needs of just the elite, because of the high cost of land and building materials.
|
|||||||||||||
Disclaimer
1) E-articles is not responsible for the information contained by this article as well for any and all copyright infringements by authors and writers. E-articles is a free information resource. If you suspect this article for any copyright infringement, please read the terms of service and contact us or use the "Report this article" button on this page to investigate the problem.
2) E-articles is not responsible for inaccuracies, falsehoods, or any other types of misinformation this article may contain and will not be liable for any loss or damage suffered by a user through the user's reliance on the information gained here. |
|||||||||||||
