ASSESSMENT OF THE PERFORMANCE OF PRIMARY MORTGAGE INSTITUTIONS IN LAGOS, NIGERIA

Abstract

The rising challenges in the provision of affordable housing necessitated the establishment of Primary Mortgage Institutions to mitigate this problem. It is however worrisome that housing deficit has continued to increase in Nigeria despite government’s concerted efforts at reducing them. This research therefore assesses the operation of the PMIs in Lagos with a view to highlight the factors affecting their optimum performance in the state. The entire eighteen (18) operational PMIs in Lagos metropolis were considered for the study. Collected data from questionnaires retrieved from thirteen (13) respondents were analysed with trend analysis, weighted mean score, descriptive statistics, granger causality and binary logistics regression model. The result for trend analysis revealed a 28 percent survival rate of PMIs in the state between 2008 and 2018. The study further revealed that only 47.02 percent of the total applications received by PMIs between 2008 and 2018 were approved, thus indicating a high denial rate. The weighted mean score reveals dearth of long-term funds, difficulty in obtaining, perfecting and transferring of title, and low interest rate on NHF investments as the top three factors affecting the performance of PMIs with weighted mean value of 4.54, 4.38, and 4.38 respectively. Granger causality test revealed that approved mortgage loan had a significant relationship with housing stock and an increase in approved mortgage loan will result in a positive increase in housing stock. The binary regression model revealed that income, collateral, interest rate and occupation are the most significant socio-economic factors contributing to applicants’ access to mortgage loan with P values of 0.000, 0.000, 0.042 and 0.044 respectively. The study recommends that adequate attention be given to the socio-economics of the Nigerian populace to ensure easy access to PMI loan. The CBN and FMBN should also be more proactive in protecting the PMIs from insolvency