Nigerian Mortgage Refinance Company (NMRC) has, within the past six months, increased liquidity in the mortgage system, having disbursed funds estimated at N2.5 billion to refinance the loans of four primary mortgage banks (PMBs) who applied for and met the requirements for refinancing.
The company says it is ready and prepared to refinance more PMBs that apply for same, and Charles Inyangete, MD/CEO of the company who disclosed this to BusinessDay in Lagos recently, hopes that before the end of the year, many more PMBs would be refinanced.
Leading the pack of benefiting PMBs is Imperial Home Mortgage Bank Limited, which, in 2015, was refinanced to the tune of N1 billion disbursed to it in September of same year. The others are Homebase Mortgage Bank, Trustbond Mortgage Bank and Sun Trust Mortgage Bank, which got N500 million apiece.
A public sector initiative but private sector-led, NMRC was set up to increase liquidity in the Nigerian mortgage market and, during its launching in 2014 by the Goodluck Jonathan administration, Nigerians were told that the company would also, within five years, create 200,000 mortgages and drag down interest rate on mortgage loan to upper single digit or lower double digit.
“This company is being set up to help lower the funding cost of mortgages and promote the affordability and availability of good housing to working Nigerians by providing mortgage lending banks increased access to liquidity and longer-term funds in the market,” Ngozi Okonjo-Iweala, the then minister of finance assured, adding, “NMRC is also expected to deliver about 750,000 homes annually, create an enabling environment for primary mortgage banks and other financial institutions to offer 15 to 20-year mortgages at affordable rates to Nigerians.”
Inyangete, however, explained to BusinessDay that, unlike the National Housing Fund (NHF), which is regulated by law and offers mortgage loans at 6 percent interest rate, “NMRC raises funds from the market and so, its rates are market-driven and the market is yet to offer single digit interest rate.”
Close market watchers had been accusing NMRC of slow movement in its refinancing of the PMBs, but Femi Johnson, a director in the company, told BusinessDay in an interview recently that the accusation was wrongly directed.
According to Johnson, the company went to the market and raised N8 billion, which, ordinarily, should have gone into the market within one month period and they should have gone back for another, but the Securities and Exchange Commission (SEC) says if it has not used up to 70 percent of the money it has raised, it cannot go for another raising.
“NMRC cannot go to raise another money until it finishes the N8 billion it has. When it went to the market, it raised the money at 15 percent and shortly after that, rates crashed in the market. The PMBs have come with loans they want to refinance but are saying the rates are too high and so, they don’t want refinance anymore,” Johnson said.
Continuing, he said, “this is why only a few of us have collected this money; what NMRC has been able to disburse so far out of its N8 billion is N2 billion to N2.5 billion. So, until it is able to disburse up to N6 billion, it can’t go back to the market to get more money.”
Johnson, whose bank (Homebase) has also been refinanced, said they would use the money as mortgage loans to Nigerians because their core business was enabling people to own their own homes.
Ben Akaneme, MD/CEO, Imperial Homes, described the refinancing of his bank as an outstanding achievement in the march towards the realisation of affordable and single-digit interest rates for mortgages in Nigeria, assuring that the bank would continue to strive to achieve its mission of enabling easily accessible and affordable mortgages to Nigerians in order to ensure housing for all.
