The Nigeria Mortgage Refinance Company Plc (NMRC) will be officially launched tomorrow (Thursday 16th January 2014)  at the Banquet Hall, State House Abuja by His Excellency Dr. Goodluck Ebele Jonathan (GCFR) Commander-in-Chief of the Armed Forces Federal Republic of Nigeria. 

This company is designed to help home/property owners to refinance their mortgage expenses if interest rates drop; using the same property as security or collateral. More importantly, the Jonathan administration seeks to use this company (promoted by the Federal Government in partnership with the private sector) to make it easier for many Nigerians to own their own houses.

According to Mrs. Okonjo Iweala, Co-ordinating Minister of the Economy – “This is central to the President’s vision for improving the economy and improving the welfare of Nigerians. When housing works, the whole economy works. From mortgage companies to building materials sellers to brick layers and carpenters and mason, the benefits in terms of job creation and overall economic development are immense”.

Managing Director, Asset Management Company of Nigeria (AMCON), Mustapha Chike-Obi had recently declared that meeting the need of Nigeria’s housing market required an annual N10 trillion for the next five years. He quipped “…the total balance sheet of banks in Nigeria annually is N20 trillion and Nigeria’s annual budget stands at an approximated N5 trillion annually; so where is the money for housing going to come from?”

This had been the concern for stakeholders till now.

In addressing the concerns of stakeholders about the new company based on the negative experiences of customers of the Federal Mortgage Bank of Nigeria (FMBN) wh had similar lofty objectives but whose contributions did not derive commensurate returns, the Federal Government affirms that it had in place, measures covering strong governance procedures and the involvement of the missing link – a strong private sector supervision supported by the oversight of its international development partners.

In support of this new company, the World Bank chipped in with a soft loan of $300 million under the Bank’s International Development Association, IDA, concessionary lending window.

To ensure that Nigerians on the lower end of the economic ladder are not left out, the government is also focusing on mass housing, especially lease-to-own options with initial beneficiaries coming from 14 pilot states.

In announcing the proposed MRC early  this year, the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala said the federal government was also working on mass housing schemes with a rent-to-own option for workers to reduce the housing deficit in the country. According to her, the target of the first stage of the mass housing scheme is to increase the number of completed mortgages from the current 20,000 housing units to 200,000 units in three years. “Though this target is quite a tough one, we believe that with the leadership of the President and the commitment and hard work of the various ministries and agencies involved, it is achievable,” she said, adding that plans were underway to develop the required policy and legislations to support the proposed reforms in the housing sector.

Source: Proshare