The role of the informal sector in housing provisioning in Kumasi
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Date
2015-04-23
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Abstract
Housing plays a key role in the socio-economic development of every country but
unfortunately, housing supply worldwide has not been able to meet demand. The
inadequate housing is one of the biggest challenges facing both developed and
developing countries today with finance being a crucial factor. The informal sector is
the largest housing supply system but has not been able to meet the increasing
demand partly as a result of the inadequate and ineffective financial mechanisms for
financing housing in the country.
The study therefore investigated the major finance mechanisms used by the informal
sector and factors which hinder their access to formal credit facilities. It also made
suggestions to improve access to credit facilities to the informal sector to improve
housing delivery.
A cross-sectional research design was adopted as a research approach for the study.
The simple random sampling was used to select the ten communities whilst the
convenience sampling method was used to select the homeowners. In order to
increase the accuracy of the work, the research was operated at a 95 percent
confidence level with a 5 percent margin of error. A total of 310 interviews were
conducted out of the total determined sample size of 392.
The study came out with some major findings which included the dominant use of
informal source of finance, the existence of an underdeveloped mortgage market and
uneasy access to formal credit facilities from financial institutions due to the type and
nature of jobs. It was realised that this has affected housing delivery because
homeowners had to build incrementally which took a lot of time before house
completion.
The study recommended microfinance for housing, site and services scheme by the
financial institutions and a non-mortgage lending facility for the informal sector.
Also, how to sustain the formal credit facilities for the informal sector is seen as an
area for further research.
Description
A thesis Submitted to the Department of Planning
Kwame Nkrumah University of Science and Technology,
Kumasi, in partial fulfilment of the requirement for the award of a degree
of
Master of Science in Development Planning and Management