Financing Housing Development in an Underdeveloped Financial Market: Learning from Developers’ Financing Adaptations?

Figures & data

Table 1. Qualifications and positions of respondents (%).

	N	Prebachelor’s	Bachelor’s	Postgraduate
General/project manager Operations manager	33	15.2	42.4	42.4
Chief Executive Officer/director	19	26.3	15.8	57.9
Quantity surveyor	7	0.00	57.1	42.9
Architect	5	0.0	0.0	100.0
Project/site engineer Site manager	7	42.9	28.6	28.6
Sales/financial/marketing manager	6	0.0	33.3	66.7
Procurement manager	1	0.0	0.0	100.00
Others	4	0.0	100.0	0.00
Total	82	15.9	35.4	48.8

Note. Prebachelor’s qualifications = vocational/technical/apprenticeship (2.4%) and postsecondary diploma/higher national diploma (13.4%).

Source: Authors’ field survey (2020).

Table 2. Developers’ characteristics.

Years of operation
Up to 5 years	24.4%
6–10 years	32.9%
11–15 years	18.3%
16–20 years	8.5%
21–25 years	6.1%
26+ years	9.8%
N	82
Full-time staff
Up to 10	22%
11–20	18.3%
21–30	9.8%
31–40	14.6%
41–50	20.7%
51–60	3.7%
61+	11%
Mean^b	34
Average housing units built annually
Up to 10 units	42.7%
11–20 units	15.9%
21–30 units	3.7%
31–40 units	6.1%
41–50 units	13.4%
51 units +	18.3%
N	82
Mean^a	31
P50	15
P90	80
SD^a	35

Note. ^aExcludes a developer building 400 units per annum.

^bExcludes a developer with 500 staff.

Source: Authors’ field survey (2020).

Table 3. Developers’ sources of capital and frequency of use for the past 5 years (%).

	Never	$\to$			Always	P50	P90
	(1)	(2)	(3)	(4)	(5)
Retained profits	4.9	15.9	30.5	30.5	18.3	3	5
Clients’ deposits	15.9	8.5	31.7	32.9	11	3	5
Bank loans	48.8	15.9	19.5	13.4	2.4	2	4
Loans from mortgage companies	57.3	11	23.2	7.3	1.2	1	3
Loans from rural banks	86.6	11	1.2	1.2	0	1	2
Private funds	28	15.9	26.8	19.5	9.8	3	5
Credit from suppliers	40.2	19.5	26.8	13.4	0	2	4
Others	87.8	0	12.1	0	0	0	1

Source: Authors’ field survey (2020).

Table 4. Relative ranking of sources of development finance.

Source	RII	Rank
Retained profits	0.685	1
Clients’ deposits	0.639	2
Private funds	0.624	3
Credit from suppliers	0.534	4
Bank loans	0.409	5
Loans from mortgage companies	0.368	6
Loans from rural banks	0.234	7
Others	0.224	8

Source: Authors’ field survey (2020).

Table 5. Spearman rank correlation of housing development finance sources.

	Retained profits	Clients’ deposits	Bank loans	Loans from mortgage companies	Loans from rural banks	Private sources	Credit from suppliers	Others
Retained profits	1.000
Clients’ deposits	−0.179	1.000
Bank loans	−0.113	0.061	1.000
Loans from mortgage companies	0.013	0.089	0.458^c	1.000
Loans from rural banks	−0.073	−0.123	0.365^c	0.379^c	1.000
Private sources	0.105	−0.030	−0.173	−0.087	0.134	1.000
Credit from suppliers	0.063	0.306^c	0.272^b	0.311^c	0.193^a	0.147	1.000
Others	0.018	−0.071	0.024	−0.015	0.173	0.006	−0.068	1.000

Note. ^aCorrelation is significant at the 0.1 level.

^bCorrelation is significant at the 0.05 level.

^cCorrelation is significant at the 0.01 level.

Source: Authors’ field survey (2020).

Table 6. Spearman rank correlation of housing development finance sources and developers’ features using a 5-point Likert scale.

	Retained profits	Clients’ deposits	Bank loans	Loans from mortgage companies	Loans from rural banks	Private sources	Credit from suppliers	Others
Years of operation	0.264^b	−0.147	0.211^a	0.268^b	−0.023	−0.164	0.053	−0.068
Annual sales revenue	0.059	−0.083	0.162	0.091	−0.028	−0.062	−0.006	−0.168
Staff size	0.103	0.003	0.163	0.109	−0.07	−0.159	0.093	−0.17
Average housing units supplied annually	0.122	0.058	0.115	0.075	0.188^a	0.075	0.073	−0.074
Typical homebuyers
Foreigners	−0.246^b	0.422^c	0.157	0.038	0.063	0.093	0.176	−0.312^b
Nonresident Ghanaians	−0.037	0.174	0.304^c	0.17	0.248^b	0.082	0.269^b	−0.219^b
Residents	0.246^b	0.008	0.122	0.257^b	−0.001	−0.246^b	−0.156	0.096
Institutions	0.072	0.035	0.126	0.194^a	0.151	0.238^b	0.149	−0.286^b

Note. ^aCorrelation is significant at the 0.1 level.

^bCorrelation is significant at the 0.05 level.

^cCorrelation is significant at the 0.01 level.

Source: Authors’ field survey (2020).

Table 7. Mean comparison of developers’ characteristics by financing source using T test for equality of means.

	At least one formal finance		Only informal finance		t test
	M	SD	M	SD
Years in operation	14.9	1.9	10.7	1.69	0.09^a
Annual sales revenue^a	3	1.6	2.9	1.4	−1.28
Staff size	50	12.3	30.4	5.1	−1.49
Housing units supplied annually	42.3	10.6	28.9	5.7	0.26

Note. ^aBased on a Two-sample Wilcoxon rank-sum test; median, SD, and z value are reported.

*p < .1. **p <.05. ***p <.01.