Relationship between Challenges Militating against Mortgage Finance and Benefits of Mortgage Acquisition in Ghana: Case of SSNIT

Abstract

Past studies on the mortgage market of Ghana evidenced that absence of long-term sources of housing funds, low-income levels, macroeconomic instability, inability to assess the creditworthiness of prospective mortgagors among others plague the development of Ghana’s mortgage market. Therefore, this study was conducted to evaluate the relationship between challenges militating against mortgage finance and benefits of mortgage acquisition in Ghana. Questionnaires were used to elicit responses from respondents. Convenience sampling technique was used to select one hundred (100) respondents comprising staff at SSNIT Head Office in Accra, SSNIT contributors, beneficiaries of SSNIT funds, mortgage applicants, owners and occupants of SSNIT flats. Mean score ranking, Cronbach’s Alpha coefficient, one sample t-test and Partial Least Square Structural Equation Modeling (PLS-SEM) were the analytical tools adopted. Dollarization of mortgage markets, access to funding for the scheme, macroeconomic instability and inability to assess creditworthiness of mortgage applicant were the most significant challenges. The most significant benefits were: (1) increase in the rate of house construction; (2) ability to provide a relatively low-interest credit; (3) capacity to mitigate housing deficits; and (4) capability to provide a relatively long-term credit for housing. Structural Equation Model was developed to evaluate the relationship between the challenges and benefits. The study is beneficial to stakeholders such as policymakers, financial institutions, Ghana Real Estate Developers Association (GREDA) and SSNIT contributors. This work is a pioneering study in Ghana on the relationship between challenges SSNIT encounters in mortgage financing and benefits of acquiring mortgage facilities with the assistance of SSNIT.