Saturday 16 February 2013
Akuapem Odwira Festival - Group Report
AKUAPEM ODWIRA FESTIVAL
Group Report
Introduction
Our
sincere gratitude goes to His Excellency Mr. Amoh Bediako for whom without the
feeling expressed by people about the Odwira festival would have been a
distance reality.
The
Akuapem Odwira festival was initiated by the 19th Okuapemhene of
Akropong , Nana Addo Dankwa I (1811 – 1835) and was first celebrated in October
1826.
Importance
It
significance is to celebrate their victory over the invisible Asante army
during the historic battle of Katamanso near Dodowaand 1826 and also to cleanse
themselves and ask for protection from their gods.
The
Odwira festival which is a week-long series of traditions and rituals performed
to purify the town, the people and most importantly the ancestral stool of the
chiefs, is a festival which is loved by all and witnessed by many.
Group
The group arrived on the fifth day of
the celebration which is the climax of the Odwira festival to witness the grand
durbar. The group, sharply dressed in uniform attire alighted at Aboa offei a
suburb of Akropong at exactly 8:30 am before the schedule time. The group was
offered a mat on a beautiful lawn under a palm plantation (Abenase) by His
Excellency Mr. John Amo Bediako where we prayed and exchanged pleasantries with
other groups.
Speech
The group further went to the house of
Aboa offei where a speech was delivered about the youth changing the lives of
Africans and a woman being a great leader in the next ten (10) years. He
encouraged and motivated us that we should change Ghana through creativity and
innovation with divine spiritual power. He made reference to the Japanese
having hundred procedures to move an arrow and how it has helped their nation.
Festival
Durbar
The
group got to Akropong at the time the
chiefs were being “air borne” in a palanquin, by their attendant, dancing and
bouncing in the air whilst there is drumming and singing going on, on the
packed street. The Okuapimhene Nana Addo Danquah III and the queenmother were
in their full regalia with lot of gold ornament displayed on their heads,
necks, wrists and fingures. After a couple of hours being “air borne” the chief
was sent to the durbar ground to be seated. More drumming, dancing and rituals
were performed each signifying a past event.
Conclusion
The group witnessed that aside the
spiritual, cultural and social aspect of the Odwira festival, it has also
become the platform for development of the various entrepreneurial skills of
the people of the Akuapim and the country as a whole.
Thank You.
ABDUL-WAHAB
MUBARIK
Friday 15 February 2013
PROJECT ON MORTGAGE LOANS IN GHANA
1.0 INTRODUCTION
It is undeniable that
mortgage financing is vital to every economy because it accounts for a sizeable
portion of a country’s productive activity through backward linkages to land
and labor markets, as well as related industries.
Since it is
inextricably linked to a country’s economic development, apart from
strengthening financial institutions, promoting social stability and improving
people’s lives, the sector should have by now seen enormous growth, culminating
in affordable houses for Ghanaians.
At the individual
level, housing finance or mortgage - the pledging of a property to a lender as
a security for a mortgage loan not only enables access to homeownership but
also to meet basic needs – a means of economic empowerment.
However, the situation
seems not to be encouraging because only the rich or a few people have access
to it. With a population of over 22 million, Ghana currently
has a labour force of over 11.29 million and its economic fortunes are looking
brighter with a per capita income of $1,400 as at 2007.
An analysis of housing
conditions reveals that on a national basis, 48.9 percent of all Ghanaian
households live in accommodation associated with the compound (44.5 percent
live in compound rooms). Another 25.3 percent lives in separate houses and 15.3
percent resides in semi-detached houses.
Economic performance
has improved in recent years with growth rate reaching 6.4 percent in December
2007 while inflation had remained slightly stable keeping interest rates also
slightly firm but the housing finance market has not seen massive development
due to the inability of the urban poor to acquire their own houses.
Though the real estate
companies such as Regimanuel Gray, Manet Cottage and Ayensu Real Estates
Limited have constructed some affordable houses for sale, the prices have been
high, ranging from $35,000 upwards.
The situation calls for
serious mortgage financing since it could assist people to get their own
houses, Charles Bonsu, Head of Mortgage and Consumer Loans at HFC Bank said. “HFC
Bank, then Home Finance Company was the pioneering company to begin housing
finance in Ghana somewhere in the 1980s assisting the development of the
housing sector, but the industry has not seen much growth since the
concentration has been low.
However, the
involvement of some financial institutions such as Ghana Home Loans, UBA, and
Barclays gives some hope that the housing deficit in the country which as at
2006 was between 500,000 to 800,000 could see some improvement.
It is said that 500,000
houses are needed annually according to studies conducted by the Ghana Real
Estates Developers Association (GREDA).
In August 2007, the
International Finance Corporation invested $25 million to support three
financial institutions –Ecobank Ghana, Merchant Bank and Fidelity Bank, to
boost their mortgage operations in Ghana.
A loan of US$30 million
was also facilitated in 2006 by the Overseas Private Investment Corporation
(OPIC) to support a solely private Ghanaian housing company, Ghana Home Loans.
Between 1990 and 1998, the Social Security and National Insurance Trust (SSNIT) provided over 30,000 blocks of flats in the country, principally in regional capitals like Accra, Cape Coast and Takoradi but the development stopped until government stepped in with an ongoing affordable housing programme.
Between 1990 and 1998, the Social Security and National Insurance Trust (SSNIT) provided over 30,000 blocks of flats in the country, principally in regional capitals like Accra, Cape Coast and Takoradi but the development stopped until government stepped in with an ongoing affordable housing programme.
The construction of
these affordable housing units is taking place at Borteyman and Kpone in
Greater Accra and Asokore Mampong in the Ashanti region. The same is being
replicated in other regions such as the Eastern region.
Again, mortgages serve
as a source of investment for many investors particularly those with long-term
liabilities such as Pension Funds and Insurance Companies. It is indeed a huge
area of investment.
Therefore
the objective of this study is to evaluate the performance of mortgage loans in
Ghana of Ghana Home Loans (GHL). It is hoped that the findings of this study
will give Ghanaian a clear understanding of the various performance challenges
of mortgage loans.
2.0
PROBLEM UNDER INVESTIGATION
The problem
under investigation is to evaluate the performance of mortgage loans in ensuring that Ghanaian have access
to better home facilities that is, What are the trends in house prices in Ghana, and what is
driving this trend, How does the mortgage market affect the provision of
housing in Ghana, and overall performance of mortgage loans.
3.0
OBJECTIVES OF THE STUDY
The
main objective of this research is to:-
i.
To evaluate the performance of mortgage
loans in Ghana, case study at Ghana Home Loans (GHL).
ii.
Factors
leading to poor mortgage financing.
iii.
To make recommendation as to how the improvement
of mortgage loan accessibility to Ghanaian.
4.0
SIGNIFICANCE OF THE STUDY
A mortgage is a long-term loan that a borrower obtains
from a bank, thrift, independent mortgage broker, online lender or even the
property seller. The house and the land it sits on serve as collateral for the
loan. The borrower signs documents at closing time giving the lender a lien
against the property. If that borrower doesn't make payments as agreed, the
lender can take the home through foreclosure. Because mortgages are such
large loans, consumers pay them off over long periods -- usually 15 to 30 years.
Their monthly payments gradually whittle away the principal balance, slowly at
first then rapidly toward the end of the loan.
When escrow is used, a monthly mortgage payment is called a PITI payment. That's because each one covers a portion of the following four costs:
When escrow is used, a monthly mortgage payment is called a PITI payment. That's because each one covers a portion of the following four costs:
Principal:- the loan balance
Interest:- interest owed on that balance
Real estate Taxes:- taxes assessed by different government agencies to pay for
school construction, fire department service, etc.
Property Insurance:- insurance coverage against theft, fire, hurricanes and other
disasters
Borrowers
can choose to pay their real estate taxes and insurance in lump sums when they
come due, rather than in monthly installments to their escrow accounts.
Depending
on the kind of mortgage a borrower has, the monthly payment may also include a
separate levy for private mortgage insurance (PMI) or government-backed
mortgage insurance premiums.
The
breakdown of each payment (the amount that goes toward principal, interest,
etc.) changes over time because mortgages are based on a repayment formula
called amortization. That's a fancy term meaning the lender spreads the
interest you owe on the mortgage over hundreds of payments so that the overall
loan is as affordable as possible.
On
a 30-year, $150,000 mortgage with a fixed interest rate of 7.5 percent, a
homeowner who keeps the loan for the full term will pay $227,575.83 in
interest.
The
lender can't possibly expect that person to pay all that interest in just a
couple of years so the interest is spread over the full 30-year term. That
keeps the monthly payment at $1,048.82.
But
the only way to keep the payments stable is to have the majority of each
month's payment go toward interest during the early years of the loan.
Of
the first month's payment, for instance, only $111.32 goes toward principal.
The other $937.50 goes toward interest. That ratio gradually improves over
time, and by the second-to-last payment, when we're all driving hover cars and
have colonized the moon, $1,035.83 of the borrower's payment will apply to
principal while just $12.99 will go toward interest.
5.0 LITERATURE REVIEW
5.1.0 Theoretical Literature
Under
the theoretical review of this study, concepts, principles and some basic
theories of mortgage loan in Ghana will be covered as follows;
Ø Overview
of mortgage loans in Ghana.
Ø Types
of mortgage loans.
Ø Mortgage
Market Development In Ghana.
Ø Definitions of Mortgage loan
Ø Housing
problem in Ghana.
Ø Housing
types and prices in Ghana.
Ø Factors
affecting the development of a vibrant mortgage market in Ghana.
Ø Research Of
House Providers And Mortgage Providers.
Ø Role
of Mortgage loan.
Ø Importance
of Mortgage loan.
Ø Functions
of Mortgage loan,
Ø The
link between Mortgage loan and corporate loan.
Ø Models
of mortgage loan.
5.1.1 Overview
and meaning of mortgage loan
In simple terms, a mortgage is a loan in which your house
functions as the collateral. The bank or mortgage lender loans you a large
chunk of money (typically 80 percent of the price of the home), which you must
pay back -- with interest -- over a set period of time. If you fail to pay back
the loan, the lender can take your home through a legal process known as foreclosure.
For decades, the
only type of mortgage available was a fixed-interest loan repaid over 30 years.
It offers the stability of regular -- and relatively low -- monthly payments.
In the 1980s came adjustable rate mortgages (ARMs), loans with an
even lower initial interest rate that adjusts or “resets” every year for the
life of the mortgage. At the peak of the recent housing boom, when lenders were
trying to squeeze even unqualified borrowers into a mortgage, they began
offering “creative” ARMs with shorter reset periods, tantalizingly low “teaser”
rates and no limits on rate increases.
When you couple bad
loans with a bad economy, you get rampant foreclosures. Since 2007, more than
250,000 Americans have entered foreclosure proceedings every month. Now those
foreclosures are turning into full-on repossessions, which are expected to
reach 1 million homes in 2010.
Looking back at
the flood of foreclosures since the housing crash, it’s clear that many
borrowers didn't fully understand the terms of the mortgages they signed.
According to one study, 35 percent of ARM borrowers did not know if there was a
cap on how much their interest rate could rise. This is why it’s essential to
understand the terms of your mortgage, particularly the pitfalls of
“nontraditional” loans.
In this research, we'll look at each of
the many different types of mortgages, explain all of those confusing terms
like escrow and amortization, and break down the hidden costs, taxes and fees
that can add up each month. We’ll start with the most basic question: What is a
mortgage?
5.1.2.0 Types of mortgage loans.
Basically there are five (5)
types/products of a mortgage in Ghana and they are explained below;
5.1.2.1 Home Purchase Mortgage
(HPM) / First Time Buyer:
Home Purchase Mortgage is a loan product designed to assist individuals
and companies to purchase residential properties for their own use or for
rental. This program is for both first-time buyers and existing homeowners. The
borrower is usually expected to make a minimum 15% down-payment and the bank
provides a loan equivalent to a maximum 85% of the purchase price. The loan terms
are usually 15 years and interest rates on home loans in Ghana are always
variable (ARM) interest rates.
5.1.2.2 Home Equity Mortgage (HEM) / Equity
Release:
This product is designed to enable borrowers who currently
own a home to release the equity in those properties to improve their liquidity
position. Individuals or companies who have properties that are either fully
paid for or are currently financed, but do have equity, may apply for this
loan. The loan proceeds could be used for home improvement, expansion of
businesses, paying overseas school fees, buying a car or taking a well-deserved
vacation. The maximum loan allowed under this program varies from bank to bank,
but the loan term is usually for 15 years and the interest rates are always
variable.
5.1.2.3 Home Completion Mortgage
(HCM) / Refinance:
This product is designed to assist borrowers with financing
to complete the construction of their homes. These houses could have been
started with the borrower’s own resources or through financing from their
employers, bankers or another mortgage company. The idea is to help bring the
project to completion to help the borrower achieve the goal of homeownership.
Again, the maximum loan varies from bank to bank but the loan term is 15 years,
the maximum loan-to-value is usually 50%, and the interest rate is variable.
5.1.2.4 Home Improvement Mortgage (HIM) / Home Completion:
Home Improvement Mortgage is designed to assist borrowers with financing
to undertake renovation and extension work on their existing homes. The target
group for this product is existing homeowners and companies who have properties
that need renovation or improvement. This loan product is pretty similar to the
Home Equity Mortgage described above, but under this program the proceeds must
strictly be used on the existing home.
5.1.2.5 Construction Finance / Home Construction:
Construction Finance is currently offered in three (3) different ways
(a) Construction finance to the real estate developer (b) Construction finance to
the borrower and (c) Construction finance to the customer of the real estate
developer. In all cases this facility will be for the construction of homes.
The target market for this product is mainly real estate developers
5.1.3.
Mortgage
Market Development In Ghana.
Housing is very important
to the social and economic fabric of
a nation, hence the need to have insight into the industry that produces and
manages the development of housing in the economy. Experiences from developed
countries indicate that the mortgage industry is the most capable and superior
financier of housing needs of a people.
The
ratio of Mortgage Debt Outstanding (MDO) to Gross Domestic Product (GDP) for
any economy is an important proxy for measuring mortgage market development.
Ghana has indeed achieved some moderate improvement in the mortgage market over
the past three years as mortgage debt outstanding grew from 2.5 per cent in
2004 to 3.9 per cent in 2006. Even though this improvement is significant when
compared to the less than 0.1 per cent of GDP for Russia for example, it still
falls short by a significant margin in comparison with the range of 7-15 per
cent in most other middle-income countries.
5.1.4 Definitions of
Mortgage loan.
Mortgage is a
legal document that pledges a property to the lender as security for payment of
a debt. Instead of mortgages, some quarters use First Trust Deeds. Like any
other markets, the mortgage market has two main primary players; the Mortgagor (the
borrower on the demand side) in a mortgage transaction who pledges property as
security for a debt and the Mortgagee (the lender on the supply side) who
offers the loan.
The secondary
players in the market, mostly on the supply side, include:
ü Mortgage
Bankers (generally assumed to originate and fund their own loans, which are
then sold on the secondary market);
ü Mortgage
Brokers (that originate loans, then place those loans with other lending
institutions with whom they usually have pre-established relationships);
ü Mortgage
Insurance Companies (providing insurance to cover the lender against some of
the losses incurred as a result of a default on a home loan); and
ü Mortgage
Regulatory Institution (a legal body providing the legal framework for the
enforcement of laws of contract and standard of practices, including procedures
for foreclosures etc.)
A
fully developed mortgage industry has two main markets.
Ø The
Primary Mortgage Market (PMM) where transactions between companies
that
originate and service mortgage loans (banks, savings & loans, credit union,
mortgage bankers, institutional lenders) are affected. Then,
Ø the
Secondary Mortgage Market (SMM), where existing mortgages are bought
and
sold. These markets are inter-twined and are affected by both domestic and
foreign monetary developments. A well functioning mortgage industry has the
primary function of increasing funding for housing at competitive cost and
pricing.
It
is noteworthy to emphasize that, a successful development of a vibrant mortgage
market depends on the existence of certain fundamentals: a stable macroeconomic
environment which attracts external funds, availability of long-term finance,
an efficient regulatory framework that ensures a secure and transparent land
title, effective delivery system, capacity to ensure repayment and
foreclosures. Like all prices, any factors which affect demand or supply will
affect the price and the overall development of the markets. The case for Ghana
is considered in the next sect.
5.1.5 Housing
problem in Ghana.
The housing problems in Ghana are characterized
by both backlog in the provision of formal housing and the resultant sprawl of
informal settlements. The informal construction industry is not capable of
meeting demand and providing large quantities of houses. The formal sector
therefore has a role to play in provision of housing especially in the urban areas.
Formal housing construction was in the past undertaken by government through
state agencies (Karley and Akomea 2007). But government realized that its
housing financing policy was not sustainable and that it would rather facilitate
construction by encouraging the private sector to participate. This changed the
role of its agencies to becoming market players and competing with the private
real estate developers. But housing delivery process is characterized by high
costs.
Attempts to resolve the housing problem requires seeking
solutions to the problem of land availability. Other constraints faced by
housing developers include the lack of capital, utility infrastructure issues,
inability to procure materials at low cost and inadequacy of labour. For most
private sector developers, the typical housing unit cost breakdown is as shown
in Table.
Table 1: Housing unit cost breakdown
Accra, Ghana.
Cost Items
|
Proportion of Cost
|
Land
|
15 %
|
Financing
|
20 %
|
Infrastructure
|
13 %
|
Material and Labour
|
36 %
|
Overheads and profit
|
16 %
|
Depending the
location and circumstances, costs for similar housing units in the UK
are for land (up to 50%), finance (up to 10%), material and labour (up to 40%)
and overheads and profits (about 20%).
5.1.5.1 Land cost
Land
acquisition and registration constitutes about 15% of the cost of housing unit.
This normally includes costs associated with the extremely time consuming,
expensive and cumbersome process involved in land acquisition and registration.
The country’s land market is concentrated in Accra and other major cities. Land
prices are extremely high in upscale residential areas in Accra such as Cantonments,
Labone and the Airport Residential Area with price range from US$120,000 to
US$200,000 for a 0.4 acre plot. According to NTHC Properties (2007) source
serviced 100x70ft plot in areas near the capital such as East Legon, Tema and
Sakomono is for sale at between US$12,000 to US$18,000. A study of informal
urban land transactions in Accra also shows that whilst the land price is often
artificially over priced, the willingness to pay a high price for a plot of
land is influenced by several factors including the level of development, water
and electricity nearby, access road availability, litigation and layout
approval. But location has been the strongest determining factor.
5.1.5.2 Finance cost
One
of the biggest problems facing housing construction is the lack of funds for
developers of all sizes. Finance constitutes one-fifth of cost of a housing
unit. But lending terms in Ghana in the last few years have been extremely
onerous for developers. The interest rates were about 40% in the early 2000s,
but went down to a still high 29% in 2004 when inflation had fallen from 30% to
about 15%. Currently, development loans
from financial institutions, if granted, are often at very high rates, in the
region of 25% to 30% but maturities in the market are very short from a few
months to a maximum of two years in most cases (ISADA 2007). Banks appear to be interested in investing in
relatively low risk financial instruments such as government bonds and treasury
bills. The high development cost means Housing construction is often undertaken
incrementally through personal savings. But some large developers pool funds
from other sources including overseas. For example, Regimanuel Construction Ltd
is One of the successful developers to attract investors from Texas in the US
to invest in Regimanuel Company and now changed the company name to Regimanuel
Gray Ltd in 1991. Other real estate developers raise capital by selling housing
products to potential buyers off plan. But this often proves dif ficult in view
of the fact that not all potential buyers are able to keep to the payment
schedules.
5.1.5.3 Infrastructure provision and Cost
A
key attraction to a housing estate is the infrastructure available in the area.
Access roads, water, sewerage and electricity connections are the most
important utility services which needed to be provided. But the lack of
development of these facilities by municipalities in the country means that real
estate developers have to ensure that these infrastructures are developed to ensure
that the end housing product will be purchased. Real estate developers wanting to
connect their residential projects to this infrastructure must bear the full
costs of connectivity to the main system, which can be very expensive. It is estimated
by developers that investment in infrastructure varies from 10% to 30% of
the price of a housing unit depending on the location of the site in relation to existing utilities’
infrastructure. All these charges are, however, passed onto the ultimate house
purchaser. Owing to recent increases in government investment in infrastructural
development, there has been a reduction in infrastructure cost in the overall
cost of housing unit to about 13% for major real estate developers.
5.1.5.4 Materials cost and labour
In
Ghana there appear to be an overdependence on external markets particularly for
building materials for which local substitutes can be developed and for which
there is comparative advantage for local production. Iron rods, cement, tiles, paint
and a host of other materials are imported. Although there are no capacity constraints,
the level of material prices can have a negative impact on housing programmes.
The average price increase for cement between 2005 and 2007 was excessive, at r
oughly 100%. Also, the high cost of credit has had adverse effects on the cash
flow of building materials enterprises. Thus, a common factor cited for low
plant capacity utilization was the lack of working capital to purchase raw
materials. Housing delivery is
also limited due to the fact that real estate developers do not have enough
capacity. Mass housing programmes will require more and skilled construction
companies. The unavailability of construction companies with the required
skills and expertise for the development of significant real estate projects highlights market failures
which hinder housing market development.
5.1.6 Housing types and prices
Typically,
the range of current housing products available in the formal residential property
sector in Ghana can be categorized as shown in Table 2 (a). However, it must be
noted that the product range and prices depend on the type of developer. For
government construction companies and agencies such as the State Housing
Company (SHC) and the Social Security and National Insurance Trust (SSNIT) they
tend to deliver housing with a focus on affordable housing and so their
products are arguably developed to suit this market. Since the SHC was
established in 1955 it has delivered a total of about 20,773 housing units,
8,417 of which are in Accra. This is a fairly low number, considering over 50
years of operation. Over the years SSNIT has been involved in a number of
housing schemes including built to rent; approximately 12,000 housing units were
built under this scheme but later most were offered for sale to sitting
tenants. The products and average price range of these parastatal development
institutions can be seen in Table 2(b). Table 2(c) also shows the housing
products and average price range of residential property developed by private
developers such as Regimanuel Gray Ltd (current market leader), Manet Ltd, NTHC
properties Ltd, ISADA Homes Ltd etc. Generally, houses priced at GH¢50,000 and
above in 2007 comprised 70% of the total development/sale volume by private
developers (GREDA 2007). Besides, most transactions above the GH¢100,000
category were in the Tema and Accra metropolis. But sales over GH¢250,000 were
predominant in the city of Accra. By type, detached houses are the most preferred
house type capturing over 50% of units launched by most real estate developers
in Accra and Tema during the past 5 years. However, there has been an
increasing trend towards, and popularity of, semi-detached houses that have
relatively lower construction cost and are also attractive to smaller families.
High rise units were introduced by SNNIT in major regional capitals in the
country as part of their housing schemes mainly for letting but most of these
units have been sold to sitting tenants. High rise buildings appear to be
unpopular because of their small sizes and for reasons including cultural
factors. In spite of this range of prices, most of the delivered housing units
are in the mid to high income range. Most customers of private developers tend
to be Ghanaians living abroad as demonstrated in Figure 1 that shows client
profile of the major real estate developers. Distribution of households by
occupancy status in urban areas in 2000 as shown in Figure 2 suggests a high share
of rentals in Ghana. In 2000 only 24% of urban population was owner occupiers
and nearly 40% were renting. The high level of housing relative to income and unaffordable
mortgages contribute significantly to the high share of rentals. This
phenomenon was also encouraged by certain tax advantages. Currently, the tax
code (Internal Revenue Act, 2000 (ACT 592) section 17) provides a five-year tax
exemption to a person earning rental income, residential or commercial but this
does not apply to owner occupation. A five-year tax exemption status is also
provided to real estate developers (who construct for sale) and rental
management companies (that manage residential premises only), during the first
five years of existence (Internal
Revenue Regulations, 2001 (LI 1675) section
16). These types of residential properties for commercial purposes are growing
in popularity but still make up a small element of institutional portfolios
compared to offices and other types of commercial properties (SSNIT 2007). In
the rental market, most cities in Ghana registered growing rentals between 2005
and 2007. But in the Accra and Tema metropolis higher rental increases of 30%
to 40% were reported across all types of residential properties. Monthly
rentals are normally quoted in US dollars. For a typical three bedroom house in
a good location in Accra depending on facilities such as furnishing, air
condition etc, the monthly rent ranges from US$400 to US$600 per month. Rents
for a one bedroom flat or bed sit accommodation in down town Accra and other
suburbs are between GH¢40 and GH¢60 per month. These are often with limited or
shared facilities. In most situations tenants are required to make advanced
payment equivalent to a minimum of one year full rent.
Table 2 (a): Typical house type and
price in Ghana.
House
Type
|
House
Price GHS
|
Low income
housing
|
Up to 50,000
|
Mid income
housing
|
50,000 -
100,000
|
Mid – high
income housing
|
100,000 - 150,000
|
High income
housing
|
200,000 -
300,000
|
Executive housing
|
Over 300,000
|
Table
2(b): Typical house type and price range delivered by parastatals
House
type
|
House
price (GH¢)
|
1 Bedroom semi-detached
|
Up to 30,000
|
2 Bedroom semi-detached
|
35,000 – 42,000
|
2 Bedroom detached
|
48,000 – 50,000
|
3 Bedroom detached
|
60,000 – 75,000
|
4 Bedroom detached
|
Over 80,000
|
Table 2(c) housing products and
average price range
House
type
|
House
price (GH¢)
|
2 Bedroom semi detached
|
Up to 48,000
|
3 Bedroom semi detached
|
60,000 – 80,000
|
3 Bedroom detached
|
80,000 – 120,000
|
3/4 detached
Executive house
|
150,000 – 200,000
|
Two storey semi detached
|
200,000 – 250,000
|
Two storey detached
|
Over 300,000
|
Figure 1: Client profile of private real estate
developers in Ghana
Table 3:
Estimates of average income according to expected tax return
Number of employees
|
%
out of total
|
Monthly household income ranges
(GH¢)
|
245,881
|
17
|
30-85
|
354,679
|
28
|
85
– 415
|
781,623
|
52
|
415
– 835
|
32,881
|
2
|
835 - 1,665
|
17,710
|
1
|
Above 1,665
|
Table 4:
Characteristics of housing loans in Ghana mortgage market
Loan Types
|
Loan Characteristics
|
|
Resident Ghanaian (Cedi Loans)
|
Nonresident
Ghanaian (Foreign currency loan)
|
|
Home purchase mortgage
Maximum loan
Minimum down payment
Maximum term
Processing fee
Deposit against
statutory
fees (towards registration
of legal documents)
|
$120,000 or cedi equivalent (revised upward)
20% of proposed loan
20 years
1.5% of proposed loan
3.5% of proposed loan
|
$120,000 (revised
upward periodically)
20% of proposed loan
20 years
US$250/£150
3.5% of proposed loan
|
Home Completion Mortgage
Maximum loan
Minimum contribution
Maximum term
Processing fee
Facility fee
Management fee
Legal fee
|
$120,000
or cedi equivale
50%
of cost, construction
15
years
1.5%
of proposed loan
Nil
2.5%
of proposed loan
1%
of proposed loan
|
$120,000 or cedi equivalence
50% of cost, constru. at lintel
15 years
$250 / £150
1% of proposed loan
2.5% of proposed loan
1% of proposed loan
|
Home
Improvement Mortgage
Maximum
loan
Maximum
term
Processing fee
Facility fee
Deposit against
statutory
fees (towards registration
of legal documents)
|
50%
of the value of the property and
not
exceeding the ceiling of $45,000
or
its equivalent in cedis
15 years
1.5% of proposed loan
Nil
2% of proposed loan
|
15 years
US$250/£150
1% of proposed loan
1% of proposed loan
|
Home Equity Mortgage
Maximum loan
Maximum term
Processing fee
Facility fee
Deposit against
statutory
fees (towards
registration
of legal documents)
|
80%
of the forced sale vale of the
property
or $120,000 its equivalent in cedis (whichever is lower)
15 years
1.5% of proposed loan
Nil
1% of proposed loan
|
15 years
US$250/£150
1% of proposed loan
1% of proposed loan
|
Buy, Build and Own a Home
Maximum loan (BUY LAND)
Minimum loan (BUILD)
Maximum term
Minimum down payment
Processing fee
Facility fee
Design and inspection
fee
|
$15,000 or its
equivalent in cedi $35,000 or its equivalent in cedi
10 years each for
a total of 20 ye
10% of total cost
of the land
1.5% of proposed
loan
Nil
1% on Build and
Own portion of loan only(3.5% of loan on new plots)
|
$15,000
$35,000
10 years each for a total of 20
10% of total cost of the land
$250/£150 per each proposed loan
1% per each proposed loan
|
Figure 2: Distribution of households
by occupancy in urban areas, 2000
5.1.7. Factors
affecting the development of a vibrant mortgage market in Ghana.
Informal
financing approach to the provision of housing has prevailed and dominated the
economy of Ghana since independence. Efforts to institutionalize the system of
financing housing have been limited by either an unstable macroeconomic
environment or a weak legal and regulatory environment. For instance, the First
Ghana Building Society (FGBS), Bank for Housing and Constructions (BHC) and
Social Security Bank were established to develop formal financing alternatives for
housing. However, they made little or no impact in the mortgage industry
primarily due to the absence of long-term financing opportunities necessary for
the development of a well functioning mortgage market. Indeed, an efficient and
sustainable mortgage industry thrives on activities in the secondary mortgage
market where mortgage-backed securities (MBS) are traded. Such a system links
investors, housing suppliers and house buyers (households) in a sustainable
housing delivery framework. The reasons for the lack of development of this
framework in Ghana can be attributed to both supply side factors on one hand;
and demand side factors on the other.
5.1.8 Research Of House Providers And
Mortgage Providers
A
survey on estate developers was conducted on the members of the Ghana Real
Estate Developers Association (GREDA) in the Greater Accra, Ashanti, Central
and Western Regions to sample respondent views on some important issues
relating to the development of the housing market in Ghana, and ascertain the
underlying causes of the sustained rises in property prices in\ recent times.
Both interview schedules and questionnaires were used as survey
instruments. In all, a total of
twenty-two (22) active members out of the total number of registered GREDA property
developers in the selected regions. (See Appendix for
sampled list) The study did not include non-registered members of GREDA.
5.2.1 Role
of Mortgage loan in Ghana.
Mortgage
financing, also called loan administration, is the performance of the administrative
duties associated with the loan from the time it is closed until it is paid off
at the end of the loan term. Mortgage financing facilitates the day-to-day
operations of a mortgage bank. It comprises the following activities:
5.2.1.1 Mortgage Accounting.
The
servicing of mortgage loans requires transfer of moving mortgages, accounting
collection and there cording of monthly mortgage payments from borrowers, and
the transfer of funds to investors.
5.2.1.2 Customer Administration.
Servicers
are responsible for answering any questions borrowers may have about the loan;
officers in the servicing function answer questions, solve problems, and
correct most errors in borrower records.
5.2.1.3 Taxes, Insurance and Escrow Administration.
To
protect the investor’s interest in the property, the servicer usually requires
that the borrower makes monthly deposits to an escrow or impound account. The
servicer then uses the money in the escrow account to pay property taxes and
insurance premiums when they come due.
5.2.1.4 Asset Management.
Servicers
are also responsible for taking action when accounts become delinquent. The aim is to work with the borrower to bring
the account up to date and avoid lengthy and costly legal action.
Mortgage servicing is where the bulk of a mortgage
banker’s net income is produced. In fact the mortgage-servicing group is
charged with the responsibility of safeguarding the mortgage banker’s most
valuable asset, and usually it may be appropriate to call it the “backbone”
operation of the mortgage banker. In a sense
all the activities in the mortgage lending cycle are preparatory to setting up
a profitable financial asset in the servicer’s books.
Origination
is a necessary cost to mortgage banking. While origination fees are collected
and applied against lender overheads, origination expenses usually exceed such
fees. The income from servicing pays for the losses incurred in mortgage
origination (Jess et al, 1997).Origination is the securing of a completed
application from a prospective borrower and beginning the process of gathering
supporting loan documentation. The link between origination and servicing is
that origination, being the initial assessment of the mortgage process, will
impact on the financing function; wrong assessment will create high default
rates on the mortgage portfolio.
5.2.2 Importance of Mortgage loan in Ghana.
5.2.3
Functions
of Mortgage loan.
5.2.4
The link between Mortgage loan and corporate
loan.
5.2.5
Models
of mortgage loan market in Ghana.
Household Borrower
|
Lending
Institution
|
Financial Advisor / Mortgage
Broker
|
Securitization vehicle
selling Mortgage Backed Securities
|
Retail Deposits with a Mortgage Lende
|
Global Capital and
Money Markets
|
Other Retail Savings
|
Domestic Savers
|
Pension Funds
Life Insurance
Companies
Unit Trusts
|
Overseas
Savers
|
Figure 3: A Model Mortgage finance
Industry.
5.3.0 Empirical
Literature
Under
the empirical review of the research question on evaluating the performance of
mortgage loan in Ghana on a similar topic ‘the housing market in Ghana conducted
by research department of bank of Ghana.
With
reference to research department of bank of Ghana his project work finding
brought out the following performance of mortgage loan in Ghana. His research
sought to find out how mortgage loan product performed and how it is able to
solve housing problems in Ghana.
The
study reveals three major performances of mortgage loans in Ghana. This
includes the availability of mortgage financers, the flexibility of the
mortgage types in Ghana, and strong development of the industry. Hence,
relevant and appropriate policies and procedures can be developed and implemented
performance for an effective housing in Ghana.
6.0
METHODOLOGY
6.1 Introduction
This
section of work discusses the research procedures that were adopted to carry
out the study. It mainly focuses on the population and type of research
conducted. It enhence, plot out, sources of data, population, sample size,
sample method, data collection tools analysis of data with relative to the
study.
6.2 Research Design
Both
descriptive and quantitative survey method was used in this research work. This
stems from the fact that a descriptive or qualitative survey involves the act
of collecting, organizing, summarizing and presenting data in a manner that
quickly and easily describe the given data (Nyarko Asiamah 2010).
To
continue, quantitative survey method was also used in the analysis of
questions, hypotheses, and the interpretation of data with a view of
generalizing the results of the sample for the corresponding population
parameter in our study. They basically involve data sets that are inherently numerical
and non- numerical.
6.3 Sources of Data
Source
of date is made up of both primary and secondary data were used in conducting
this study.
6.3.1
Primary Data
This
is the name given to data that are used for the specific purpose for which they
were collected. They consist of data collected at first hand in order to
satisfy the purpose of a particular research. The instrument used for the
collection of data was a questionnaire administration and interview conducted
in some special cases were clarification of certain question was important.
Questionnaire was considered as a suitable for this study because it was easier
for respondent to explain and complied at their own convenience. Moreover,
interviews were conducted on respondents to gather some relevant information.
An interview as defined by Lewis and Thorn Hill (2000) is purposeful discussion between two or more
people.
Interviews
were also conducted to obtain certain data, which was important to the study
where satisfactory response could not be obtained from the use of
questionnaires. This method offers a fast means of gathering relevant data for
the purpose of obtaining substantial information on the research objectives
(Oppenheim 1992).
6.3.2
Secondary Data
Unlike
primary data secondary data, is the name given to data that are used for some
purpose other than that for which they were originally collected. Some of these
may include; news papers, journals, magazines, textbooks, internet (websites)
and the like. The research group consulted some of the above examples for the
study.
6.4 Research Population
The
population for the study is Ghana Home Loans Company Limited (GHL) (Head
Office) and Home Financing Company Limited (HFC) (Legon Branch).
6.5 Sample size
The
sample size represents the subset of the identified population. This include
the Head of operation department all departmental and offices in administrative
functions.
6.6
Sampling method
The
research group used the simple random sampling method. The operation
departmental Head were randomly selected to aid and provide certain information
to the researchers. This method was to ensure that every possible element of
the defined population has an equal or fair chance of being of selected.
6.7 Data Collection Tools
The
data collection tool was a self development instrument which was basically
descriptive and qualitative methods.
6.7.1
Descriptive
Method
This
method was used to provide a systematic description of the data collected. This
includes percentages, charts, frequency tables and graphs.
6.7.2
Qualitative
Method
This
method was used in an interview responses received to generalize the opinions
and attitudes of respondents. However, the type of person interview was both
structured and unstructured interview.
6.8
Analysis Of Data
6.8.1 Demographic distribution of respondent
(Operational manager)
Table 2 (source
field data 2011)
Table 4:
Source field data 2012
Variable
|
Description
|
Frequency
|
Gender
|
Male
|
2
|
Age (years)
|
48
|
2
|
Occupation
|
Operational manager
|
2
|
Marital status
|
Married
|
2
|
6.8.2 Distribution of housing in Ghana.
Table 5:
Distribution of housing in Ghana
Distribution
|
Percentage
|
Compound Houses
|
46%
|
Detached
|
25%
|
Semi Detached
|
15%
|
Flat/Apartment
|
4%
|
Tents, Kiosks,
Containers etc |
2%
|
Huts, structures in
compound houses
|
4%
|
Others
|
4%
|
Figure 3: Distribution of housing in Ghana
6.8.3 Research question
According
to GREDA, the largest number of registered property developers in the country
is located in the Greater Accra Region, particularly the Accra and Tema
Metropolitan Areas. These constitute not less than 70 per cent of the total
number of developers in the country. Table 6 provides the regional distribution
of the respondents and the respective years of operation. Out of the 21 sampled
developers, more than half of the respondents were located in the Greater Accra
Region, followed by Ashanti, Western and Central respectively.
Table 6:
Distribution and length of Operation of the Respondents.
Regions
|
Number of years in
operations
|
||||
1–10 years
|
11-20 years
|
>20 years
|
Totals
|
Percent %
|
|
Western
|
1
|
--
|
1
|
2
|
9.5
|
Central
|
2
|
--
|
--
|
2
|
9.5
|
Ashanti
|
2
|
3
|
--
|
5
|
23.8
|
Grater Accra
|
5
|
4
|
3
|
12
|
57.1
|
Totals
|
10
|
7
|
4
|
21
|
100
|
The
same distributional trend applies to the years of experience of the
respondents. The greater number of experienced developers in the country is
located in the capital than all other regions. In general, however, the survey
showed that most of the respondent real estate developers have been in
operation six years and more.
Table 7:
Type of Housing Units Produced by the Respondents
Types of Units
|
Number of
developers
|
% of
total developer
|
Semi
detached
|
14
|
63.6
|
Standard
detached
|
16
|
72.7
|
Flats
|
4
|
18.2
|
Luxury
house (detached)
|
1
|
4.5
|
Stores
and Offices
|
19
|
86.4
|
Students
Hotel
|
1
|
4.5
|
The
research results also indicate that the type of housing units developed in the
country includes semi-detached and detached residential homes, condominiums and
others such as student hostels and luxury holiday homes. Table 7 gives a
breakdown of types of housing units.
Only a single respondent (4.5%) indicated that it produces luxury
detached housing units. Majority of
developers in the market produce semi-detached (63.6%), standard detached
(72.7%) or both. It is also worthy to
note that 86.4 percent of the respondents are engaged in the production of
units for stores and offices whereas little interest is shown in the production
of accommodation for students.
7.0 FINDINGS
7.1 Introduction
The
research group carried out the study at Ghana Home Loans (GHL) and Home
Financing Company (HFC) bank. The main purpose of this study was to evaluate
the performance of mortgage loan in Ghana. Upon a successful data analysis the
following findings were reached.
In
terms of addressing the performance of Ghana Home Loans (GHL) and Home
Financing Company (HFC) the following results was achieved.
Table 3 (Field
data)
MORTGAGE
FINANCING Descriptive Statistics
|
|||
1. Timeliness of the Mortgaging Transaction
Process
|
Min
|
Max
|
Mean
|
Housing
Finance Clients get/are treated gently even when are not able to service the
Mortgage transaction.
|
2.00
|
5.00
|
3.5714
|
Few clients are complaining about the many installments within
which to service the mortgage
|
2.00
|
5.00
|
3.500
|
Housing
Finance clients are expected to keep the time schedules within which to
service their mortgage
agreements
|
4.00
|
5.00
|
4.600
|
Clients
discuss with Housing Finance management about the time within which to
service their mortgages
|
4.00
|
5.00
|
4.222
|
Housing Finance delivers its mortgage services within the time
periods that it projects
|
2.00
|
5.00
|
3.444
|
2.
Default Rate In the Mortgaging Transaction
|
|
|
|
Once
clients fail to service their mortgage transactions, they easily resolve
these cases with Housing Finance
|
2.00
|
4.00
|
2.700
|
In case of failure to service the Mortgage, Housing Finance
policies are favorable for her clients
|
2.00
|
5.00
|
3.500
|
Housing
Finance has few clients on record who have failed to service their mortgage
transactions granted them by the financial institution
|
2.00
|
5.00
|
3.800
|
We
feel that the time within which to service mortgages is favorable to the ends
for which clients acquire mortgages
|
2.00
|
5.00
|
4.000
|
Conditions
of mortgage servicing are all set by Housing Finance though client
participation is highly welcome
|
1.00
|
5.00
|
3.800
|
Increasingly,
more clients of Housing Finance are servicing the mortgages acquired from
this institution
|
2.00
|
5.00
|
3.800
|
Many
individuals are willing to access Housing Finance Mortgage services without
fear of the consequences of failure to service the mortgages
|
2.00
|
4.00
|
3.300
|
Housing
Finance’s mortgage department is never worried that clients will not service
their Mortgages
|
1.00
|
4.00
|
2.375
|
3. Interest
Rate of the Mortgaging Financing
|
|
|
|
Clients
are free to negotiate for interest rates.
|
1.00
|
2.00
|
1.777
|
Mortgaging
is very profitable for Housing Finance because of Interests charged
|
2.00
|
5.00
|
3.444
|
Interest
rates can be varied by Housing Finance
|
2.00
|
5.00
|
4.000
|
A
fresh mortgage can be issued given if a client has not completed servicing
the previous mortgage
|
4.00
|
5.00
|
4.300
|
4. Turn
Around Time for Mortgaging Transactions
|
|
|
|
Housing
Finance considers the urgency of issuing the mortgage to a client
|
2.00
|
4.00
|
3.4000
|
The
Mortgage process is simple
|
2.00
|
4.00
|
2.500
|
The
Mortgage department normally updates clients on the progress of their
mortgage applications
|
2.00
|
4.00
|
3.600
|
5. Review
of Profitability at Housing Finance
|
|
|
|
Housing
Finance’s profitability has been growing for the past 5 years Housing
|
4.00
|
5.00
|
4.100
|
Finance’s
NPL Position has been declining for the past 5 years Housing
|
3.00
|
4.00
|
3.888
|
Finance’s
provisions for non-performance have been declining
|
2.00
|
4.00
|
3.700
|
6. Market
Share of Housing Finance
|
|
|
|
Housing
Finance introduced several new products in the past five years
|
2.00
|
5.00
|
3.600
|
Housing
Finance constantly devises means and strategies of reaching out to its
clients.
|
2.00
|
4.00
|
3.500
|
Housing
Finance’s loan portfolio has been growing.
|
3.00
|
5.00
|
4.100
|
Our
clientele is growing.
|
4.00
|
5.00
|
4.2500
|
Housing
Finance’s share of total loans has been increasing in the banking industry
|
3.00
|
5.00
|
3.900
|
Housing
Finance is favorably competing with other institutions in the industry
|
4.00
|
5.00
|
4.100
|
Customer
confidence in Housing Finance has improved.
|
4.00
|
5.00
|
4.2000
|
|
|
|
|
8.0 CONCLUSION AND RECOMMENDATION
8.1 Conclusion
8.1.1 Nature of the
mortgage financing transaction.
The researcher reviewed the nature of the mortgage servicing at
Housing Finance Bank and observed that clients discuss with Housing Finance
Bank management about the time within which to service their mortgages.
However, even when Housing Finance Bank clients are unable to service their
mortgage transactions, the company treats them gently. At
the same time, however, respondents reported an uncertainty as to whether
Housing Finance Bank can deliver its mortgage services within the time periods
that it projects for the clients. The turnaround times are quite irregular
varying between one month to six months or even more. From the findings of
chapter four, the researcher further noted an uncertainty as whether the
clients who fail to service their mortgage transactions can easily resolve
these cases with Housing Finance. The results further indicated that loan
officers are worried whether clients will service their mortgages and they are
also not sure if individuals are willing to access Housing Finance Bank
mortgage services without fear. Potential clients’ fears may include, though
not be limited to; embarrassment and loss of surety assets such as land titles
and other items at stake due to a client’s undertaking of the mortgage
transaction. Housing Finance’s Mortgage transactions
are also characterized by the company’s dictation of the interest rate terms
and the company can vary the interest rates as it deems fit. The institution
expressed uncertainty as to whether mortgaging is very profitable because of
interests charged. The results further revealed that Housing Finance Mortgage
department does not consider urgency in processing client’s mortgage
transactions in spite of the fact that Housing Finance endeavors to update
clients on the progress of their mortgage applications.
The relationship between mortgage financing and performance.
A positive and significant relationship between mortgage
servicing and performance indicates that if mortgages are professionally and
efficiently handled, this can result into a significant improvement in the
performance of Housing Finance Company.
Implication of the findings of the research.
Basing on the available literature and the results of this
study, the following are some of the possible implications of this research to
the institutions in the banking industry in
Ghana and other countries
in Africa.
i)
Loan
officers’ uncertainty as to whether their department can actually deliver the
mortgage transactions in the time that it promises speaks of inefficiency at
the work place. This can result in loss of potential clients as they learn from
others through negative word-of-mouth thus leading to a poor performance of the
company.
ii)
Results indicate that in case clients are unable to service
their mortgages it is not easy to resolve these cases with Housing\ Finance.
This creates a negative corporate image for the company although the corporate
image has a positive relationship with the performance of an institution.
iii)
The
mortgage department is unsure as to whether the clients of Housing Finance are
very willing to access these mortgage transactions of the bank without any fear.
On the other hand, the clients have their own fears they attach to these
mortgages. This creates a very low turn-up for the mortgages, implying the bank
will realize less from the mortgages.
iv)
Housing
Finance dictation in matters of the interest rates without any client participation
may not always be convenient for the client depending on the nature of economic
activity they engage in. The interest installments may be set so as to hinder
the progress of the client since the client participation is not entertained.
v)
Results also indicated that the Mortgage department is slow at
processing the Mortgage transactions with its clients. This can lead to
dissatisfaction of the clients or make them look for alternative institutions
to help meet their needs and hence Housing Finance loses out. In
conclusion, a positive relationship between mortgage servicing and performance
implies that efficient and skillful handling of mortgage servicing transactions
will lead to a better performance of Housing Finance.
8.2 Recommendation
In close relation to the research
findings the following recommendations are suggested to firms in the banking
industry in Ghana and any other related ones:
i) Housing Finance Bank mortgage department
should train its loan officers so as to ensure that they attain skills to
enable they process the mortgage transactions in time to meet the client needs.
ii) The Company should implement friendly
policies for the clients who fail at servicing their mortgage transactions so
as to avoid a negative corporate image with the public. Handling the clients
who are unable to fulfill their part of the mortgage deal roughly would
discourage other potential clients.
iii) To have adequate knowledge of clients’
views on their mortgage transactions, the mortgage department should conduct a
market survey so that it can get the actual views of the clients.
iv) Due to the varying capabilities of
clients in servicing their mortgage transactions, Housing Finance should
allocate mortgages to clients all the while allowing\ them to have an input on
the interest rates to be charged.
v) The Mortgage Department needs to come
up with various work-out options for
clients as a measure of effective
customer administration and management of defaults.
vi) The servicing function to be out
sourced as an alternative to other companies that are professionally competent
in that area. This will enhance the bank’s performance and corporate image.
vii) Housing Finance Bank should take
advantage of technology and innovatively introduce electronic products and
processes that will ease the servicing function roles, increase efficiency,
increase the market potential, and increase customer satisfaction and
profitability.
viii) New products and more innovative ways
in terms of the interest rate to be charged should be introduced and adopted.
For example Housing Finance Bank should segment the market in terms of earning
capacity and introduce the graduated payment mortgage, where the interest rate
is gradually increased with the level of income for a defined period. This will
increase the number of borrowers especially from the untapped market and
effectively control the number of defaults especially for the business
community whose incomes usually fluctuate.
ix) A more proactive approach to enhance\
the performance of the servicing function would be to separate it from the
other section of the mortgage department under a specialized manager with a
well remunerated workforce with measurable performance measures.
x) Housing Finance Bank should
institutionalize a customer management system so that customized communication
is channeled to clients individually. This will introduce a people friendly
approach especially when dealing with defaulters and also establishing reasons
for default individually.
REFERENCES
ü The housing market in ghanaprepared
byresearch departmentbank of Ghana November 2007.
ü Ghana
Home Loans Limited link;
ü Social
Security and National Insurance Trust (SSNIT) Interview with Head
ofdevelopment, Social Security and National insurance Trust Mr. Sam Twum,
August, 2007
ü ISADA
Homes, Interview with ISADA Homes Ltd proprietor, Mrs V ivian Poku, August
2007.
ü Ghana
Real Estate Developers Association (GREDA 2007) – Interview with President
of GREDA, August 2007.
ü Karley,
N K and S Akomea (2007) An overview of the Real Estate Market in Ghana, Paper
presented at the 12th asres
APPENDIX
Appendix
1. Research Questionnaire
INSTITUTE OF PROFESSIONAL STUDIES (IPS), LEGON
DEPARMENT
OF ACCOUNTING AND FINANNCE
Dear respondent,
Hello,
we would be grateful if you can spend some minutes answering these questions.
Please be assured that this is purely an academic exercise and all responses
will be considered with utmost confidentiality.
Topic: EVALUATING THE PERFORMANCE OF MORTGAGE LOAN IN GHANA?
SECTION A:
BACKGROUND INFORMATION
1. Gender
Male [
] Female [
]
2. Age
of respondent in years
Tick under one of the
options
|
18 - 30
|
31 – 40
|
41 – 50
|
Over 50
|
|
|
|
|
3. Highest
level of education
Qualification
|
Ordinary level
|
Advance level
|
Diploma
|
Degree
|
Post Graduate
|
Other
(Specify)
|
|
|
|
|
|
|
4. How would you rank
your position at Housing Finance
Tick
under one of the options
|
Top
Management
|
Middle
Management
|
Lower
Management
|
|
|
|
5.
How long have you been working with Housing Finance
Tick
under one of the
option
|
0-2
years
|
3-5
years
|
Over
5 years
|
|
|
|
No.
|
SECTION
B: BANK PERFORMANCEF
or
this section, please indicate your level of agreement to the statements
byticking
|
Strongly
Disagree
|
Disagree
|
Not
sure
|
Agree
|
Strongly
Agree
|
|
•
Profitability
|
|
|
|
|
|
1
|
Housing
Finance’s profitability has been growing for the past 5 years
|
|
|
|
|
|
2
|
Housing
Finance’s NPL position has been declining for the past 5 years,
|
|
|
|
|
|
3
|
Housing
Finance’s provisions for non performance has been declining
|
|
|
|
|
|
|
•
Market Share
|
|
|
|
|
|
1
|
Housing
Finance introduced several new products in the past five years
|
|
|
|
|
|
2
|
Housing
Finance constantly devises means and strategies of reaching out to its clients.
|
|
|
|
|
|
3
|
Housing
Finance’s loan portfolio has been growing.
|
|
|
|
|
|
4
|
Housing
Finance’s share of total loans has been increasing in the banking industry
|
|
|
|
|
|
5
|
Housing
Finance is favorably competing with other institutions in the industry
|
|
|
|
|
|
6
|
Customer
confidence in Housing Finance has improved.
|
|
|
|
|
|
7
|
Our
clientele is growing.
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|
|
|
|
|
SECTION
C:
Please
tick, circle or write where appropriate
1. What
type of services do the Ghana home loans provide?
…………………………………………………………………………………………………………………………………………………………………………………..
2. What
are some of the benefits enjoyed by your clients?
……………………………………………………………………………………………………………………………………………………………………………………
3. How
many divisions and branches have the firm?
(i)
Division ………………………………………………
(ii)
Branches ……………………………………………...
4.
Does the firm face any administrative problems?
If yes, state some …………………………………………………………………………………………
……………………………………………………………………………………………………………………………………………………………………………………….
5.
Do Ghana home loans face any
competitions?
If yes, name some of the competitors
…………………………………………………………………………………………………………………………………………………………………………………………………………
6. How
does your organization finance mortgage loans and invest funds in high yielding
area to ensure growth in the economy?
…………………………………………………………………………………………
…………………………………………………………………………………………….……………………………………………………………………………………
7. Types
of mortgage facility you have in your organization?
First
Time Purchase [ ] Refinance [ ] Equity Release [
] Buy To let [ ]
Home
Completion [ ]
8. Into
what purpose do you grant loans?
……………………………………………………………………………………………………………………………………………………………………………………
9. What
is the mode of application for a mortgage loan in your company?
……………………………………………………………………………………………………………………………………………………………………………………
10. What
is the repayment period of tour mortgage facilities?
……………………………………………………………………………………………………………………………………………………………………………………
11. What
type of currencies those the company applies on mortgage loans?
Ghana
new cedi [ ]
US dollar [ ] Euro [
] Pounds
[ ]
12. What
are the strategies Ghana home loans adopt when there is high inflation and high
interest rate in the country?
…………………………………………………………………………………………….……………………………………………………………………………………
13. What
is your opinion about the improvement in the housing market of the economy?
……………………………………………………………………………………………………………………………………………………………………………………
14. What
kind of contribution does your organization make to improve the economy?
……………………………………………………………………………………………………………………………………………………………………………………
9. What
are some of the forms of motivation given to the workers/others to increase
their output?
……………………………………………………………………………………………………………………………………………………………………………………
10. What
are your mortgage endowment policies?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..
11. What
kind of mortgage products do Ghana home loans have in stock for their clients?
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
12. What
is the size of mortgage loan and method of repayment?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
13. What
are the terms of initial payment and how payment is effected?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
14. Which
companies are Ghana home loans presently partnering with?
……………………………………………………………………………………………………………………………………………………………………………………
…………………………………………………………………………………………
15. Who
qualifies for a mortgage loan?
……………………………………………………………………………………………………………………………………………………………………………………
16. How
has mortgage loan helped to improve the life of beneficiaries?
……………………………………………………………………………………………………………………………………………………………………………………
17. What
is your assessment as to the performance of mortgage loan in Ghana and how has
it benefited the populace as a whole?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..
18. What
are your main challenges concerning mortgage loans?
…………………………………………………………………………………………………………………………………………………………………………………………………
19. How
has the populace responded to mortgage loan sensitization in Ghana?
…………………………………………………………………………………………………………………………………………………………………………………………………
20. What
will be your general assessment in respect of mortgage in Ghana?
…………………………………………………………………………………………………………………………………………………………………………………....
Thank
you very much for your time
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