In the context of high economic growth, Nigeria's key challenge is to make its growth more inclusive. Despite the rapid growth, direct indicators of social welfare, such as poverty levels, have shown limited improvement. Given the fact that Nigeria’s population is growing significantly, improving access to finance for housing is vital. Informal housing is most prevalent as more than 80% of the population lives in unplanned settlements with poor living conditions. The formal housing sector, which constitutes about 15% of the housing market, is insufficient to meet demand. Where supply exists, this is targeted at high-income earners, while houses categorized as low income are mainly outside the reach of low-income earners. As a result, rents and house prices are high. Other major factors affecting housing in Nigeria include limited access to finance; slow bureaucratic procedures; and the high cost of land registration and titling.
The Nigerian housing sector needs intervention in all aspects to ensure that it functions effectively. One way to achieve this is through the introduction of innovative products like housing microfinance. Unlocking the potential in the housing market requires multiple and interrelated market functions to work effectively: (a) conducive macro-economic policies that provide for stable and low inflation, (b) access to long-term finance, (c) reduced cost of business transactions in land registration and foreclosure, and (d) good quality and efficient building and construction.
To increase and improve access to housing microfinance for target group, by facilitating technical assistance to selected microfinance banks:
- Phase I: To assess the institutions and recommend a series of measures to advance the HMF in these banks, including a technical Assistance Plan and Technical Cooperation Agreement.
- Phase II: To implement this technical assistance plan through a series of measures that will have been identified.
- Phase III: To then conduct an evaluation of the results and impact of the project.