Exploring the Market for Home Improvement Financing in Urban Areas.

Oyalowo, B.A. ; Muraina, O. ; Nubi, T.G. ; Ohiro, Y. ; Basheer, O. ; Raymond, G. (2021)

Scholarly article

Book chapter

Accessibility of finance for new housing construction has been a significant preoccupation in research, policy, and advocacy circles. Access to finance for maintenance and improvement of the home once acquired remains a relatively under-researched area. This chapter aims to explore the state of the home improvement financing market in Lagos to address this gap. Home improvement financing is essential throughout the lifecycle of a property. It is a mechanism to avoid the risk of permanently substandard homes constructed incrementally and a safeguard against obsolescence in already completed homes, especially at a neighbourhood scale. Part of a larger scale study on home improvement financing for the regeneration of informal communities, this chapter presents findings from an interactive stakeholders' meeting with eleven (11) homeowners selected from low-income neighbourhoods in Lagos and representatives of three typologies of home improvement loan providers. The three typologies are a federal financial institution, a private sector mortgage bank, and a microfinance institution. It was found that while there are improvement loans that low-income homeowners could access, issues around proper legal documentation limit uptake for those who live in informal settlements. A re-engineering of the titling framework is required to address this inequality. The diversity of the home improvement loans in the market will potentially level disparities in access to financial products by lowincome families by providing them with a range of alternatives that fits their circumstances. However, the absence of neighbourhood-based home improvement loans limits the feasibility of these loan products for regeneration purposes, even though there is demand for it. In contrast, it creates opportunities for deepening the market with equitable and coproduced loan products.