De/motivations in housing microfinance delivery in Ghana

Purpose: The purpose of this paper is to explore the de/motivation variables in the delivery of housing microfinance (HMF) in the low-income housing market in Ghana. Design/methodology/approach: The paper relied on a survey of 125 respondents of microfinance institutions (MFIs) to understand the interactions and effects of these variables on HMF delivery in Ghana. Descriptive and bivariate statistical methods were used to analyse the data. Findings: The findings revealed that both internal and external variables motivate MFIs to engage in the low-income housing market. These variables are: MFIs desire for expansion, the potential size of the low-income housing market, the market potential for MFIs growth, the availability of local resources, unique features and products of the market, low-income housing offering an opportunity for leveraging resources and the preference for homeownership than rental among individuals in the low-income segment of the population. However, variables such as capital lock-up in HMF delivery, high-interest rates in the country, high cost and land prices, high cost and price of building materials, lack of sufficient collaterals and the different interest rates required on HMF loans also served as demotivation in the low-income housing market in Ghana. Research limitations/implications: The paper findings are limited in context to Ghana. Practical implications: The paper, although limited to Ghana, contributes to the much-needed body of knowledge on low-income housing finance in developing countries. Originality/value: The paper is the first of its kind in using empirical data to explore the motivational and demotivational variables in the delivery of HMF in a developing country context such as Ghana.