Real estate infrastructure financing in Ghana: Sources and constraints

Owusu-Manu, D. and Edwards, D.J. and Badu, E. and Donkor-Hyiaman, K.A. and Love, P.E.D. (2015) Real estate infrastructure financing in Ghana: Sources and constraints. Habitat International, 50. pp. 35-41. ISSN 01973975 (ISSN)

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Abstract

Finance represents a major barrier to real estate development in Ghana and constraints responsible remain unknown. In order to gain insight into this important social/economic issue, a positivist tradition of thinking via the survey approach sought to uncover, explain and rank these constraints using the Relative Importance Index. A total of 53 questionnaires were distributed to real estate developers within the Kumasi Metropolis of Ghana. The survey reveals that real estate developers predominantly use debt financing including short-term bank loans, mortgages and hire purchase. Finance is constrained by five main factors: i) legislation; ii) macroeconomic barriers; iii) collateral barriers; iv) inadequate risk assessment and diversification mechanisms; and v) a dearth of financial mobilization mechanisms. This paper provides a practical reference for the targeting of policy interventions to overcome these constraints and to catalyse the development of finance for real estate infrastructure delivery. The work is also useful to the Government, banks and capital market regulators who seek to develop the capital market to provide appropriate financing options. These options may include real estate investment trusts (REITs) and risk reduction/diversification platform via derivatives. Future research is proposed which seeks to explore practical innovations in designing tailor-made real estate financing options that meet the needs of real estate developers. © 2015 Elsevier Ltd.

Item Type: Article
Uncontrolled Keywords: Constraints, Developers, Financing, Ghana, Real estate, REITs, Risk, capital market, debt, finance, infrastructure, legislation, lending behavior, macroeconomics, mortgage lending, risk assessment, risk factor, Ghana
Subjects: N300 Finance
Divisions: UoA Collections > UoA19: Business and Management Studies
Depositing User: Miss Jessica Baylis
Date Deposited: 23 Nov 2016 12:44
Last Modified: 23 Nov 2016 12:44
URI: http://www.open-access.bcu.ac.uk/id/eprint/565

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