Journal of Emerging Trends in Economics and Management Sciences (JETEMS) 3(5): 429-438

© Scholarlink Research Institute Journals, 2012 (ISSN: 2141-7024

jetems.scholarlinkresearch.org

National Housing Trust Fund and Low-Income Housing Delivery in

Nigeria: A Discourse
1
Jolaoso, B. A., 2Musa N.A. and 3Oriola, O. A

1Dept of Architecture, Moshood Abiola Polytechnic, Abeokuta

2
Dept of Building and Quantity Surveying, Federal Polytechnic
3
Dept of Architecture, Olabisi Onabanjo University, Ibogun Campus
___________________________________________________________________________
Abstract
Housing is one of the basic needs for human existence, yet not many people can provide for themselves because
of limited means. Difficulty in accessing credit facilities have resulted into the emergence of informal
settlements through self-help approach which might have instigated the establishment of National Housing Trust
Fund (NHTF) in Nigeria. This paper discusses the challenges of accessing NHTF credit facility, with a view to
establishing or otherwise the workers’ eligibility and affordability based on Federal Mortgage Bank of Nigeria’s
Repayment Plan and their income. Data were collected from literatures and complimented with reconnaissance
survey on selected building types in Abeokuta, Ibadan and Jos metropolises and their relative cost of
construction. The study is limited to workers in the civil/public services, using subsisting Consolidated Public
Service Salary Structure in Nigeria as guide. The Average Basic Monthly Income- Repayment Plan was derived
from prevailing FMBN affordability table (2008) on the National Housing Fund loan to ascertain workers’
eligibility and affordability or otherwise. Information gathered was reviewed, discussed and descriptively
presented. Findings are that NHTF is not easily accessible for low income housing delivery due to low income
and savings; stiff pre-conditions for accessing land and credit facilities etc; and concludes that increase in
workers’ salary will stimulate more participation/contributions and improve upon investible fund that will in
turn enhance accessibility to NHTF credit facility for low income housing delivery.
_________________________________________________________________________________________
Keywords: low-income housing, credit, accessibility, affordability, eligibility.
__________________________________________________________________________________________
INTRODUCTION thereby favouring the high and middle income
Housing is widely and globally regarded as one of the groups. Accessing long-term credit facility for
basic of human needs for human existence which acquisition or development of personal homes has
transcend the provision of shelter but including been a great challenge among the Nigerian low
infrastructures and other supporting facilities like income earners. Available Long-term credit facility
schools, health, etc. Agbola (2005) posited that, the for home acquisition or developments for the low
house is an institution created for a complex set of income group in Nigeria are basically from the NHTF
purposes beyond provision of shelter. He further and the Private Financial Institutions (PFIs). The
opined that, it is a social unit of space where every NHTF operates on a depository arrangement whereby
human being resides, irrespective of age, sex and civil servants and self-employed persons contribute
status differences. This fact had not been lost to part of their monthly income into the Fund through
government, according to Arayela (2005), under the their respective employers or by direct payment into
third National Development Plan (1975-1980), the the FMBN in order to access the appropriate
Federal Government of Nigeria proposed to build credit/loan facility. Events have however, revealed
202,000 housing units all over the country, that few contributors to the Fund have benefited from
comprising 8000 units in each of the then nineteen the mortgage loan, because the NHTF is inadequate
State capitals, with the exception of Kaduna and in providing for the housing needs of its contributors
Lagos States which were allotted 4000 and 46000 (Ozili (2009). He further noted that the pre-conditions
additional units respectively, which were not realised. for accessing loans are not affordable to the low
In spite of the intention, Agbola (1998 & 2005) noted income group and the poor. This however led to the
that the period of third National Development Plan emergence of PFIs providing mortgage credit/loan
was when housing units became more scarce and facility to prospective home-owners and property
costly, relative to income and as such described the developers. Kuroshi, Mallo, Mosaku and Anigbogu,
period as abysmal failure. This implies that part of (2008) observed that interest rates chargeable on
the reasons for the failure was that the houses were credit facility provided by Private Financial
designed and built to completion through contractor, Institutions are usually very high and on a very short
before being handed over to prospective users, repayment tenor. CBN (2009) revealed that the recent
without their respective inputs into the process global financial crisis on the Nigerian financial
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Journal of Emerging Trends in Economics and Management Sciences (JETEMS) 3(5):429-438 (ISSN:2141-7024)

system have also affected mortgage financing in conditions for accessing credit facility for home-
Nigeria. acquisition/housing delivery from Financial
Institutions and to ascertain low income workers’
Thus, Nigerian banks have adjusted their respective affordability of credit or Loan facility based on one-
interest rates against the financial crisis while the third of Average Basic Monthly Income- Monthly
Central Bank of Nigeria has in turn adopted new Repayment Plan
policies for the Nigerian financial system as a result
of the crisis. However, Kolapo and Amaefule (2009) SCOPE OF STUDY
and Spio-Garbrah (2009) are of the view that such The study is limited to low income workers in the
policies may further create impediments to accessing civil/public service or in the self-employment whose
credit for home acquisition and/or development by source(s) of income is /are salary or wage oriented,
prospective home owners. The likely impediments with the view to ascertaining or otherwise whether
identified included liquidity problems and the monthly/annual incomes can guarantee credit for home
emergence of shadow banking. What had become acquisition or can conveniently pay off loans or credit
obvious is that the goal of the National Housing facilities for home ownership/acquisition on one-third
Policy of 1991 at ensuring that all Nigerians own or of Average Basic Monthly Income- Repayment Plan.
have access to decent, safe and healthy housing The prevailing pre-conditions for accessing credit/loan
accommodation at affordable cost or price has not facility from NHTF and PFIs through mortgage; as
been achieved. Perhaps, that was why Agbola (2005) well as the affordability table on the NHTF Loan
states that there exists a yawning chasm between the amount at six (6) percent interest rate as obtained from
magnitude of demand and the capacity of supply. the Federal Mortgage Bank of Nigeria (2008) were put
This gap had resulted to individuals resorting into into consideration. Workers income is established
self-help approach. The self-help approach had been from the subsisting Consolidated Public Service Salary
aided by personal equity/cooperative formations or Structure (CONPSS), by Ministries, Departments and
whole/ part subsidy by employers of labour through Agencies in Nigeria.
loans or mortgage financing that is backed by
securities and/or cooperative mechanism. Low Definition of Terms
income/wages, high lending rates, tax requirements, Income implies the wages or monetary
difficulties in land administration and mortgage rewards/benefits in cash and/ or in kind realizable in
transactions etc have been identified as the greatest exchange of goods and services and/or trading,
impediments to credits/loan facility and that drift to businesses etc. Low-income earners are group of
the peri-urban areas are most of the time driven by persons who averagely earn relatively small amount
lack of adequate fund to compete in main urban of money and/or kind as reward for their respective
centres with all its implications for other supporting labour. Low-income group according to the National
facilities or lack of them. This forms the basis for the housing policy of 2002 are all employees or self
research problem, taking into consideration, the employed persons whose annual income as at the
conditions for accessing NHTF, year 2001 is N100, 000 or below (i.e. the equivalent
contributor’s/participant’s affordability of credit or of salary grade level 01-06 in Government
Loan facility based on one-third of Average Basic employment). In this context, Low income earners
Monthly Income- Monthly Repayment Plan at a also include individuals (in civil/public and private
maximum tenor of 30 years. It is against this employment services or self-employed) whose
backdrop that the paper tries to examine the monthly/annual incomes cannot guarantee credit for
challenges of accessing the National Housing Trust home acquisition or whose monthly or annual income
Fund for low income housing delivery in Nigeria. cannot conveniently pay off loans credit facilities for
home ownership/acquisition. Housing delivery
RESEARCH QUESTIONS involves the production of new houses, renovation of
The research questions are: existing ones and the distribution of new and old
houses to all consumers. Its components include land
Is the National Housing Trust Fund through FMBN and infrastructures, construction technology, labour
accessible for low income housing delivery in and management, building materials, housing
Nigeria? finance, distribution methods and monitoring
evaluation. National Housing Trust Fund is a
Is the average monthly income a hindrance to dedicated fund for housing finance established by the
accessing the available credit facility for low income Federal Government of Nigeria as one of the key
home-ownership? strategies towards the realisation of the goals of the
National Housing Policies of 1991, 2001 & 2006. It
AIM & OBJECTIVES started as contributory fund (NHF) established by
The aim of this paper is to appraise the challenges of decree 3, 1992 with Nigerian workers, banks,
accessing credit facility for low-income housing registered insurance companies and federal
delivery in Nigeria. The objectives are to appraise the government of Nigeria as contributors. It later

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Journal of Emerging Trends in Economics and Management Sciences (JETEMS) 3(5):429-438 (ISSN:2141-7024)

metamorphosed into NHTF sometime in 2005, due to income households, where the ‘sequential housing’
labour union agitation arising from their inability to development approach is adopted, which is based on
benefit from their respective contributions into the affordability rather than need and provision of other
fund. The fund further made it mandatory for certain supporting facilities. It is a system of building
categories of workers to contribute certain percentage construction from micro to macro, subject to a time
of their respective monthly income into the fund lag. Hence, the construction of housing structure
before they could benefit therefrom as participants to through component parts or sub-units, which are
enable them build, buy, or improve or renovate their often time dictated by available and affordable
houses. The Federal Mortgage Bank of Nigeria financial resources rather than the need (Jolaoso,
(FMBN) is the financial institution established by Odebiyi, Musa 2008). Emeka (2010), reports that
Decree 7 of 1977, with a take-of capital of about ₦20 Nigeria requires about 15 trillion naira to solve its
million, which was later increased to ₦150 million in housing deficit estimated at 16 million units and
1979 and supported by the World Bank to attain a noted that relying on the contributions from the
capital of about ₦600 million. This led to the NHTF would be counter-productive as there are
construction of housing units in about eight States of about 40 million applications for mortgage from
the Federation of Nigeria during the 4th National qualified Nigerians with about 2 billion naira
Development Programme (1980-85). It is the monthly proceeds from NHTF. This suggests that the
custodian of NHTF and the highest financial available fund from the NHTF is inadequate to meet
authority charged with the responsibility of licensing, up with the subsisting mass housing demand
regulating and supervising PMIs especially for the low income group. The inability of
(commercial/merchant banks, insurance, housing employers and/or collecting agencies to appropriately
corporation, property development companies, etc) in and timely remit (check-off dues from salary)
Nigeria. It invests in and provides financial and contributions into the NHTF must have also
technical assistance for the production of building contributed to the fund inadequacy. Dung-Gwom and
materials aimed at improving the overall Mallo (2008) also identify low income/wages, high
performances in the housing sector. Sources of lending rates, tax requirements, difficulties in land
funding the NHTF include the Nigerian workers, administration and mortgage transactions etc as the
banks, registered insurance companies, and the greatest impediments to accessing credits/loan
Federal Government of Nigeria. facility. Erguden (2001) noted that poor promotion of
security of tenure, inadequate infrastructures and
LITERATURE REVIEW housing finance systems, inadequate participation of
Housing development is a vital economic activity, communities in shelter development process and
which provides substantial employment opportunities support to self-help and lack of effective
and one of the parameters for measuring the implementation strategies are some of the constraints
standard/quality of life, the level of technological to achieving effective low income housing delivery in
advancement, culture and civilization within an developing countries like Nigeria. He further revealed
environment. Provision of affordable housing for the that the difficulty in having access to housing
citizenry has remained the principal focus of every development elements like land, building materials,
successive government in Nigeria. This is because of credit facilities have resulted in proliferation of
the pivotal roles played by housing in national informal settlements. These unsolved housing
development and growth on one hand and its being a problems in most cases have prompted the poor urban
necessity in the life of the people, on the other. dwellers to drift into the available low cost, low
Omojinmi (2000: in Adedeji, 2005) observed that access or marginal land in the peri-urban areas
people who sleep outside the houses in the urban compared to what is obtainable at the inner city or
centres of Nigeria, out-number those that sleep inside urban centres. Low-income groups in the developing
the houses. Arayela (2002) also asserted that there is countries tend to build their houses incrementally
inadequate housing stock to cope with the ever- according to available financial possibilities, opting
increasing population and the available housing for relatively small amounts with a maximum of 5
facilities in Nigeria. Ajanlekoko (2001) reported that years (Smets, 2005).
in Nigeria, housing is typically financed through a
number of institutional sources: Budgetary Housing represents not only the largest non-food
appropriations, Commercial/Merchant Banks, household expenditure, but also the most valuable
Insurance Companies, State Housing Corporations and main capital asset possessed by most low income
and the FMBN. He further noted that the impact of households (Datta and Jones, 1999; Ferguson and
informal institutions such as thrift and credit Haider, 2000). A common belief is that one solution
societies, and money lenders be properly quantified to poor housing is to increase the amount of income
because they are largely uncoordinated, scattered and available to low income households. By so doing, it
varied in scope and operational depth. This might is expected that the means by which the poor are able
have given rise to many informal residential /housing to build more and better quality housing would be
development activities largely embraced by the low- improved (Datta and Jones, 1999). Therefore,

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preceding application), current tax clearance principle that the tenor of repayment of credit/loan
certificate and Board Resolution supporting loan facility as 20 years but in reality are usually less than
application; Fidelity Bond, Errors and Omission 20 years. Central Bank of Nigeria’s report (2009),
Insurance Policy; while in case of individual reflects that the ratio of banks to people in urban area
application, he/she is expected to complete and is 1:33,000 while for rural area it is 1:57,000, and that
submit the standard PMIs Application Form for NHF about 35% of Nigerians have access to banks while
loan alongside with current tax clearance certificate, 65% do not have access to it and are the poor/low
evidence of contribution into the fund is/are required income earners. This of course, will constitute a great
by individual applicants. Fulfilling these conditions limitation/impediment to accessing credit/loan
qualifies Contributors access to credit/loan facility facility for home-acquisition in Nigeria. These
and to enable beneficiary build, buy, or renovate limitations/impediments include the contributor’s
his/her house. The prevailing credit/loan ceiling requirement to provide evidence of land ownership in
facility for a contributor is ₦5million. The fund the form of certificate of ownership/title in which its
(NHTF) provides access to similar facility to Estate procedure is very cumbersome and takes a long
developers, housing corporations and the Federal period of time to secure. It involves too many levies,
Housing Authority (FHA) for housing development taxes and fees for securing title, governor’s consents
or building houses at affordable target price not and development permit. The Nigeria Land Use
exceeding ₦5million for sale to contributors through Decree/Act (LUD) which was promulgated in March
the Private Mortgage Institutions. Such credit/loan 1978 provides that, all land were brought under the
facility is granted on the basis of the contributor’s control of the State government and the rural land
ability to pay off within his/her 30 percent of his/her being controlled by the Local government. Its
average monthly income and repayment plan of a provision and its implementation appeared to have
maximum 30years tenor. mopped out available pieces of land that could be
used for other developments like houses for the
Ozili (2009) posits that the NHTF is inadequate in masses by the people themselves. This policy action
meeting up with the housing needs of its contributors. was expected to enhance the transformation of the
He further notes that the pre-conditions earlier stated Nation’s property rights from a mixed private
for accessing loans are not affordable to the low property rights to a collectivist framework (Iwarere
income group and the poor. This however led to the 1994; Arimah 1997).
emergence of Private Financial Institutions providing
mortgage credit/loan facility to prospective home- Iwarere & Megbolugbe (2008 p.205) posits that the
owners and property developers. These Private contractual process precipitated by the re-assignment
Financial Institutions undertake savings and loans of property rights inherent in the leasehold estate to
activities as well as, finance construction project, replace the freehold becomes more tedious and
property brokerage and Local Purchase Order adversarial; that the property rights regime ushered in
financing. by the Landuse Decree/Act is less efficient and does
not promote growth and conclude that the issue of
Ibuoye (2009) observes that the Private Financial land registration in the emerging economies have
Institutions often generate a net return of between 20 negatively affected the willingness of the supplier of
– 25% annually and are mostly conglomerates of housing finance to provide funds for housing
commercial banks in Nigeria servings as channel for acquisitions. Hence, in consideration of proper
National Housing Trust Fund contributors. A survey banking procedures, funds are not disbursed to
of conditions for accessing credit for home borrowers until all lending conditions are met.
acquisition was carried out by Dung-Gwom, et al Therefore, applications for funds to acquire houses
(2009) on five Private Financial Institutions reveals are kept in abeyance until the land registration
that identified conditions attached to accessing credit procedures are completed and the documentations
for home acquisition by private financial institutions submitted to the suppliers of housing finance, while
indicated denial of low income earners access to the cost of building kept rising. The implication is
credit/loan facility; that there are instances where that, where the funds are available, they are
employers have refused to guarantee employees for inadequate for the extant market price. This have in
loan even when they have satisfied other turn contributed to the impediments and as such,
requirements; That the provision of 2.5% down needs to be reviewed because it has not achieved its
payment presents a great challenge to low income aim of equitable distribution of land.
earners who often finds it difficult to raise; and the
Interest rates charged by private financial institutions RESEARCH METHODOLOGY
are on the higher side. Consequently, cost of loan The methodology involves the collection of data from
became very high. primary sources, relevant published and unpublished
materials as well as sundry information. The study
Dung-Gwom, et al (2009) further revealed that the was complimented with reconnaissance survey on
private financial institutions have always stated in some selected housing units development in

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Journal of Emerging Trends in Economics and Management Sciences (JETEMS) 3(5):429-438 (ISSN:2141-7024)

Abeokuta, Ibadan and Jos metropolises on building prevailing pre-conditions for accessing credit/loan
types and their respective relative cost of facility from National Housing Trust Fund and
construction. The study is limited to workers in the Private Financial Institutions through mortgage and
civil/public service or in the self-employment whose the affordability table on the National Housing Fund
source of income is salary or wage oriented. (NHF) Loan were used to ascertain workers’
Workers’ income was established from the subsisting eligibility or otherwise to access credit/loan facility.
Consolidated Public Service Salary Structure The information gathered is reviewed, discussed and
(CONPSS) in use by Ministries, Departments and descriptively presented.
Agencies in Nigeria. The Average Basic Monthly
Income- Repayment Plan and with respect to the

DATA PRESENTATION AND DISCUSSION

Table 2: Determination of Workers Affordability and Eligibiltiy for Loan Monthly Repayment Plan and
Average Cost of House Type
House Types & Number Of Years Required For The Repayment On The Basis Of Subsisting 1/3 Average Basic Monthly
Loan Amount Income/Salary Vis-A-Vis Grade Levels And At The Required 6% Interest/Annum
Required
(₦) 01 02 03 04 05 06 07 08 09 10 12 13 14 15 16 17
grade level
Maximum of 2 0 83 78 74 69 64 49 37 29 25 21 18 17 15 14 13 12
million
Maximum of 3 0 124 117 112 104 96 74 55 44 37 32 28 25 23 22 19 18
million
Maximum of 4 0 165 157 149 139 128 98 74 58 49 43 37 34 30 29 26 24
million
Maximum of 5 0 207 196 187 174 160 123 92 73 62 53 46 42 38 36 32 30
million
Source: Author’s Computation (2010).
maximum of ₦ 2.0 million credit/loan facility; while
Table 2 considered and applied subsisting Average the most senior workers on grade levels 10 and above
Basic Monthly Income of workers with maximum could afford and are eligible to access between ₦
tenor of repayment at 30 years in determining their 2.0- 4.0 million credit/loan facility and that only the
affordability and eligibility for accessing NHTF workers on grade level 17 could only afford and are
credit/loan facility. It reveals that none of the workers eligible to access up to a maximum of ₦ 5.0 million
on grade levels 01 -07 (low income group) can credit/loan facility through the NHTF, provided that
neither afford nor eligible to access the NHTF their respective remaining period in
credit/loan facility and that workers on grade levels service/employment is not less than twenty years.
08 -09 could afford and are eligible to access a

Table 3: Determination Of Workers Affordability And Eligibiltiy For Loan Monthly Repayment Plan And
Average Cost Of House Type
House Types Number Of Years Required For The Repayment On The Basis Of 1/3 Average Basic Monthly Income/Salary
& Loan Vis-A-Vis Grade Levels, Anticipated New Minimum Monthly Wage Of ₦18,000.00 Bench Mark Or 300%
Amount Increase Across Board And At The Required 6% Interest/Annum
Required
(₦) 01 02 03 04 05 06 07 08 09 10 12 13 14 15 16 17
grade level
Maximum of 27 26 25 23 21 16 12 10 8 7 6 6 5 5 4 3
2 0 million
Maximum of 41 39 37 34 32 25 18 15 12 11 9 8 8 7 6 5
3 0 million
Maximum of 55 52 49 46 42 33 25 19 16 14 12 11 10 10 9 8
4 0 million
Maximum of 69 65 62 58 53 41 30 24 21 18 15 14 13 12 11 10
5 0 million
Source: Author’s Computation applying anticipated
increase in Average Basic Monthly Income
credit/loan facility. It reveals that all workers on
Table 3 considered and applied anticipated increase grade levels 01 -17 would be able to afford and be
in Average Basic Monthly Income of workers (at eligible to access the NHTF credit/loan facility up to
minimum bench mark of ₦18,000.00 or 300% wage- the tune of ₦ 2.0 million and that workers on grade
increase across board) with a maximum tenor of levels 07 -17 could afford and are eligible to access
repayment at 30 years in determining their up to a maximum of ₦ 5.0 million credit/loan facility;
affordability and eligibility for accessing NHTF while workers on grade level 06- 07 could still afford
and be eligible to access up to a maximum of ₦ 3.0
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million credit/loan facility through the NHTF. The - 4.0 million credit/loan facility for one-bedroom
table ordinarily assumed that participating workers on to three bedroom bungalow and that only the
each level are at their first year of employment. But workers on grade level 17 can afford and are
considering change in status (i.e. rise from one level eligible to access up to a maximum of ₦ 5.0
to another, like GL.06 – 12 or 14) by promotion or million credit/loan facility through the NHTF for
appointment or any other similar adjustment vis-a-vis home-ownership and within the allowable tenor of
length of service, it implies that the determination of repayment plan (i.e. one-bedroom to four
contributors’ affordability and eligibility to access bedroom bungalow) depending on the finishing
NHTF credit facility will also depend on their taste.
respective years-left- in- service or in active  Most of the contributors lack capacity to afford
employment, which must not less than twenty years. loan amount that can acquire houses for
themselves as a result of the subsisting low
FINDINGS income, but with wage increase by about 300%
The summary of findings is as follows: (i.e. ₦18,000.00 as minimum monthly
 That contributors must be gainfully employed wage/income) as illustrated in table 3, all
and/or have a reasonable means of regular categories of workers (G.L. 01 -17) would be able
income. He/she must have contributed for a to afford and be eligible to access the NHTF
minimum period of six (6) months into a credit/loan facility up to a minimum of ₦ 2.0
designated bank account and must have not less million (an equivalent of average cost of one-
than a period twenty years left in service (if bedroom bungalow) through the NHTF.
employed), irrespective of their entry, rise and  And that housing deficits especially for the low
current salary grade level; and/or 2.5% down income earner keeps increasing and that self-help
payment of the total value of credit/loan required. approach might have instigated the establishment
 Contributors in public and organised private of National Housing Trust Fund
sectors must domicile their salary account with  for low income housing delivery in Nigeria.
the designated banks providing fund to the PMIs,
while their respective employers would suffice as RECOMMENDATIONS
guarantor(s). Based on the findings stated above there is need for
 That contributors must provide evidence of upward review of salaries for workers (especially the
possession of valid title to land (Certificate of low income earners) to enhance contributors’
Occupancy) and/or the building acquired with the affordability and eligibility status in order to facilitate
loan as collateral security and that affordability their access to credit/loan facility for home
and eligibility of the contributors’ access to NHTF acquisition/ownership through NHTF or mortgage.
for home-acquisition is determined on a Group acquisition, ownership and documentation of
repayment plan and a maximum tenor of thirty land by employers or cooperative societies for and on
years based on the contributors’ 1/3 average basic behalf of individual members of such formations
monthly income and at 6% interest/annum. need to be encouraged by the government apart from
 That accessing credit/loan facility for home the need to review the landuse act such that the
acquisition by low income earners directly from process of registering land titles, obtaining
Private Mortgage Institutions whose source of governor’s consent etc are not cumbersome but made
funding comes from commercial banks is faster and less burdened with taxes, levies and fees.
expensive due to low savings rate, rising interest The Government needs to provide a regulatory
and inflation rates. Consequently, an average mechanism on lending rates that is pro-poor or low
investor would rather prefer to invest in the income earner-friendly. Cooperative formations for
informal sector, where return on investment self-help contribution, in which Jolaoso, Odebiyi and
would be above the inflation. Musa (2008a) had noted to be viable sources of
 The number of potential home-owners or mobilising substantial capital for financing low
applicants for accessing NHTF credit/loan facility income housing delivery as an informal financial
is more than investible funds available for housing mechanism should be integrated into the formal
finance supply. sector under the supervision of the mortgage
 Workers on grade levels 01 -07 (low income institutions. It is also recommended that the emerging
group) can neither afford nor be eligible to access sequential housing development approach be further
the NHTF credit/loan facility for even the least of encouraged for mobilising funds and construction of
the house types (i.e. one-bedroom bungalow); house units at affordable cost without jeopardising
while workers on grade levels 08 -09 can only quality and safety. This of course must be carried out
afford and are eligible to access a maximum of ₦ in collaboration with relevant professional bodies,
2.0 million credit/loan facility for only one- construction development banks and Private
bedroom bungalow; Mortgage Institutions in an inclusive manner and as
 Most senior workers on grade levels 10 and above an investor-guided development that could include
can afford and are eligible to access between ₦2.0

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Journal of Emerging Trends in Economics and Management Sciences (JETEMS) 3(5):429-438 (ISSN:2141-7024)

the investment of the pensions fund in housing Asaju, A.S (1991). The Impact of Government
delivery on a long-term lending basis. Policies on the Private Rented Housing Sector in
Nigeria- A Review of the State of Art. Journal of
CONCLUSION Estate Management Students Association O.A.U, Ile
The paper noted there has been a rise in the housing Ife, Nigeria. p.43
deficit and identified low income, low savings rate,
high interest and inflation rates as factors delimiting Central Bank of Nigeria (2009). Global Financial and
low income earners’ access to the NHTF for home- Economic Crisis: How Vulnerable is Nigeria? Central
acquisition/ownership. It also reveals that there are Bank of Nigeria.
more applications from eligible contributors over and
above the investible funds available for housing http://www.cenbank.org/OUT/SPEECHES/2009/GO
finance supply. Most contributors lack capacity or VADD-21-1-09.PDF retrieved 24/03/2009
chance to access credit/loan facility for home
acquisition. The paper therefore concludes that the Datta, K. and Jones, G. (eds.1999) Housing Finance
National Housing Trust Fund through FMBN is not in Developing Countries, Routledge, London.
easily accessible for low income housing delivery in
Nigeria due to the subsisting low average monthly Dung-Gwom, J.Y & Mallo, D. M., (2008). An
income. It is hoped that the enunciated Appraisal of the Challenges of Accessing Credit for
recommendations, if and when adopted as Home Acquisition by Low-income Earners in
complimentary strategy will encourage more Nigeria. Proceedings of the XXXVI IAHS World
participation, stimulate more contribution and Congress on Housing Science, Kolkata India.
improve upon fund mobilisation that will in turn www.gla.ac.uk/media/media_129707_en.pdf
enhance low income earners’ access to NHTF
credit/loan facility for home acquisition or ownership Emeka, E (2010). Vision 2020: Nigeria needs ₦15
and low income housing delivery. trillion to Finance Mass Housing Policy. The Sunday
Punch Newspaper. Lagos. December 19, 2010. P.60
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tenure choice in Ibadan - Nigeria, Urban Studies
January 1997, Vol.34 Issue 1 pp 105-124.

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 Journal of Emerging Trends in Economics and Management Sciences (JETEMS) 3(5):429-438 (ISSN:2141-7024)

Table 5: Average Monthly Income of Public Sector

Workers in Nigeria
Grade Average 1/3 Of Computation/Projections
Levels Basic Average based on anticipated new
Income Basic minimum monthly wage of
/Month Income/ ₦18,000.00 as bench mark
Month Average 1/3 Of
Basic Average
Income Basic
/Month Income/
Month
01 6030:95 2010 31 18,092 85 6030:95
02 6361 64 2120 54 19,084 92 6361 64
03 6680 64 2226 88 20,041 64 6680 64
04 7184 08 2394 69 21,552 24 7184 08
05 7805 18 2601 72 23,415 54 7805 18
06 10,196 56 3398 88 30,589 68 10,196 56
07 13,528 79 4509 59 40,586 37 13,528 79
08 17,198 76 5732 92 51,596 28 17,198 76
09 20,255 61 6751 87 60,766 83 20,255 61
10 23,484 99 7828 33 70,454 97 23,484 99
12 26,891 94 8963 98 80,675 82 26,891 94
13 29,731 27 9910 42 89,193 81 29,731 27
14 32,696 44 10,898 81 98,089 32 32,696 44
15 34,810 65 11,603 55 104,431 95 34,810 65
16 38,614 40 12,871 46 115,843 20 38,614 40
17 41,802 99 13,934 33 125,408 97 41,802 99
Source: National Salaries and Wages Commission,
Abuja. Nigeria (2008) & Author’s computation
(2010).

The computation/projection columns reflect possible

increase in volume (about 300%) contribution into
the National Housing Trust Fund over the subsisting
situation.

Table 6: Federal Mortgage Bank of Nigeria

Affordability Table (2008) on the National Housing
Trust Fund (NHTF) With Loan Amount At Six (6)
Percent Interest Rate/Annum
Tenor (Years 5 10 15 20 25 30
Monthly loan Monthly loan Monthly loan Monthly loan Monthly loan Monthly loan
repayment repayment repayment repayment repayment repayment
(₦) (₦) (₦) (₦) (₦) (₦)
Loan amount
50,000 00 966 64 555 10 421 93 358 22 322 15 299 78
100,000 00 1,933 28 1,110 21 843 86 716 43 644 30 599 55
250,000 00 4,833 20 2,775 51 2,109 64 1,791 08 1,610 75 1,498 88
500,000 00 9,666 40 5,551 03 4,219 28 3,582 16 3,221 51 2,997 75
750,000 00 14,499 60 8,326 54 6328 93 5,372 23 4,832 26 4,496 63
1,000,000 00 19,332 80 11,102 05 8,436 57 7,164 31 6,443 01 5,995 51
1,250,000 00 24,166 00 13,877 56 10,548 21 8,955 39 8,053 77 7,494 38
1,500,000 00 28,999 20 16,653 08 12,657 85 10,746 47 9,664 52 8,993 26
1,750,000 00 33,832 40 19,428 59 14,767 49 12,537 54 11,275 27 10,492 13
2,000,000 00 38,665 60 22,204 10 16,877 14 14,328 62 12,886 03 11,991 01
2,250,000 00 43,498 80 24,979 61 18,986 78 16,119 70 14,496 78 13,489 89
2,500,000 00 48,332 00 27,755 13 21,096 42 17,910 78 16,107,54 13,988 76
2,750,000 00 53,165 20 30,530 64 23,206 06 19,701 85 17,718 29 16,487 64
3,000,000 00 57,998 40 33,306 15 25,315 70 21,492 93 19,329 04 17,986 52
3,250,000 00 62,831 60 36,081 66 27,425 35 23,284 01 20,939 80 19,485 39
3,500,000 00 67,664 81 38,857 18 29,534 99 25,075 01 22,550 55 20,984 27
3,750,000 00 72,498 01 41,632 69 31,644 63 26,866 16 24,161 30 22,483 14
4,000,000 00 77,331 21 44,408 20 33,754 27 28,657 24 25,772 06 23,982 02
4,250,000 00 82,164 41 47,183 71 35,863 92 30,448 32 27,382 81 25,480 90
4,500,000 00 86,997 61 49,959 23 37,973 56 32,239 40 28,993 56 26,979 77
4,750,000 00 91,830 81 52,734 74 40,083 20 34,030 48 30,604 32 28,478 65
5,000,000 00 96,664 01 55,510 25 42,192 84 35,821 55 32,215 07 29,977 53

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