Identifying the barriers to housing finance in Ethiopia

Purpose - The accessibility of housing for many purposes is more influenced by the functioning of housing market. As access to housing is an expensive and long-term exertion of household, looking for appropriate housing fund is necessary whether the source of fund is private saving or mortgage. However, insufficient finance in Ethiopia is a reason for inaccessible of land and housing by the low- and middle-income people. This study aims to identify the barriers to access finance in the study area. Design/methodology/approach - This study adopted a qualitative and quantitative research approach to investigate the barriers of housing finance. To undertake and increase the relevance of this study, primary and secondary, qualitative and quantitative data were used. Primary data were collected from respondents; focal person’s and key informants. Both descriptive statistical analysis and relative importance index analysis was deployed for this study. In addition, the quantitative data were analyzed using logistic regresion model. Findings - The result of this study found that in Ethiopia at all, there is no enough mortgage and long-term lending banks. The result of this study inspects some variables significantly affect the access to finance. The result of this study will help the government in buildup of financial institutions in many perspectives. Financial institutions and clients may also be beneficiary through stiffen housing finance system. Originality/value - The barriers of access to finance were not sufficiently studied in Ethiopia. Therefore, this study may be a pioneer for the researchers, as it did not cover the whole area of the country to study and also appoint the government to reform the financial sector based on the findings of the researches.