Housing sector plays a more critical role in a country’s welfare than is always recognized. This is because it
directly affects not only the wellbeing of the citizenry but also the performance of other sectors of the economy.
Besides, housing is one of the basic needs of life; and also one of the indices of measuring the standard of living.
Thus, because of its potential for socio –economic development, housing development used to occupy a
prominent place in the policy decisions and budget outlays of Government world over particularly those of
developing nations. (See Sanusi, 2003; Manoj, 2010)
However, Ferguson (1999) observed that the great bulk of home finance in Africa, Asia and Latin American and
the Caribbean comes from outside commercial finance and institution. Household use their own savings, sweat
equity, barter arrangements and their sources to build their homes. This is because government housing
programmes have failed them; besides, mortgage lenders and housing developers are scarce and where they are
available, they are unaffordable and mostly focus on the middle and upper market segments. (See also Solares,
2007).
Thus, their services are inaccessible for household with informal incomes and informal tittles. Hence, they resort
to the informal form of housing finance to provide a home where they and their families can live in security and
comfort.
Therefore, the concern of this paper is to discuss the impact of informal microfinance on mortgage financing in
Nigeria, using a rural area experience.
The next section examines the conceptual issues of informal microfinance and mortgage finance. Section three
discusses the data source and methodology. Section four presents the discussion of the results. Section five
provides the conclusion and recommendation.