Empirical Analysis of Primary Mortgage Institutions Fundamentals and Gross Domestic Product Increase in Nigeria

Abstract

This study seeks to empirically analyze Primary Mortgage Institutions (PMIs) Fundamentals and Gross Domestic Product Increase; in other words, economic growth in Nigeria. The (PMIs) fundamentals in the new PMIs guidelines include Mortgage finance, Investments and Deposits taking. Thus, PMIs Loans, PMIs Investments and PMIs Deposits are adopted as the explanatory variables and served as proxies for PMIs fundamentals to explain Gross Domestic Products (GDP). Data used for empirical estimation were sourced from CBN statistical Bulletin, 2011 and 2013 and analyzed using Multiple Regression technique parameters. The research findings were robust. The statistical parameters exhibited high coefficients and the F-statistics which indicates the overall significance of the model stood at 75.23. These results led us to reject the null hypothesis and accept the alternate hypothesis that there is a strong relationship between GDP and PMIs Loans, PMIs Investments and PMIs Deposits. However, the coefficients of the t-test parameters were low indicating that the impact of the explanatory variables on GDP was very minimal, meaning that their contributions to GDP were not relevant. Conclusively, the results indicate that while there is a significant relationship between GDP and PMIs variables, the impact of these variables on GDP was not significant during the period under review. Thus, we recommend that relevant policies with capacity to boost the activities of PMIs for maximum productivity should be enacted by government regulatory agencies in order to re-equip the housing finance market and increase the ratio of mortgage finance as a percentage of GDP.