By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-The Central Bank of Nigeria (CBN) Thursday unveiled a minimum capital requirement of N5.0 billion for the Mortgage Refinance Company (MRC).
The CBN iin its regulatory and supervisory framework for the operations of an MRC said the procedures and criteria to be used in granting a licence to the MRC shall be the same as specified for banks under the Banks and Other Financial Institutions Act, CAP B3, Laws of the Federation of Nigeria, 2004 (herein after referred to as “BOFIA) and any other regulations issued by the Bank.
CBN said as part of requirements for an approval-in-principle, any promoter seeking a licence for the operation of the MRC in Nigeria shall make a payment of the sum of N5 billion to the CBN via Nigerian Interbank Settlement System (NIBSS), being minimum capital deposit which will be refunded with interest after the proposed institution obtains its final licence.
According to the CBN, as part of the general condition for granting a final licence, the promoters of the MRC shall submit certain documents to it before such company is considered for the grant of a final licence and thereafter, permitted to commence operations.
Some of the documents include evidence of payment of a non-refundable licensing fee of N200,000 or any other amount that may be determined by the CBN from time to time, a copy of the shareholders’ register in which the equity interest of each shareholder is properly reflected [together with the original for sighting among others.
On corporate governance requirements, the CBN said the ultimate responsibility for every MRC’s operations shall be vested in its Board of Directors.
The number of directors on the board of the MRC shall be a minimum of seven [7] and a maximum of fifteen [15]. The non-executive members must be at least twice the number of the executive directors at any point in time.
On Thursday January 16, 2014 President Goodluck Jonathan officially launched the newly established Nigeria Mortgage Refinance Company (NMRC) to bridge the funding cost of residential mortgages in the country.
A Mortgage Refinance Company (MRC) is a financial institution established to provide short-term liquidity and/or medium- to long-term funding or guarantees to mortgage loan originators.
Also, the MRC aims at increasing the liquidity within the mortgage sub-sector and availability of mortgage credit in Nigeria, reduce mortgage and related costs, and make residential housing more affordable.
