…disburses N2.8bn to 97 applicants under M-REIF Scheme
The Ministry of Finance Incorporated’s Real Estate Investment Fund (M-REIF) is a strategic initiative by the Nigerian government to address the nation’s pressing housing deficit and make homeownership more accessible to its citizens.
Recognising the significant financial barriers that often prevent individuals and families from owning their own homes, the government established M-REIF as a mechanism to inject capital into the affordable housing sector, thereby stimulating development and increasing the availability of reasonably priced housing units.
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Pioneering role in the M-REIF Scheme…
Recognising the transformative potential of this M-REIF scheme, AG Mortgage Bank Plc proactively engaged with the framework from its inception, positioning itself as a key partner in the government’s efforts to bridge the housing gap. Under this M-REIF scheme, AG Mortgage Bank Plc has disbursed N2.8 billion to 97 applicants, making it the first Primary Mortgage Bank (PMB) to do so.
This substantial disbursement signifies that 97 individuals or families have been empowered to achieve their dream of homeownership. Further breakdown shows an average disbursement of approximately N28.87 million per applicant (N2.8 billion for 97 applicants), which highlights the substantial level of financial support being provided to each beneficiary. With this level of disbursement, AG Mortgage Bank Plc has distinguished itself as a leading and pioneering institution in the implementation of the M-REIF scheme.
As the first Mortgage Bank to actively participate in and leverage the M-REIF scheme, AG Mortgage Bank has demonstrated a strong commitment to its core mission of facilitating homeownership for Nigerians.
Ngozi Anyogu, Managing Director, AG Mortgage Bank Plc, had articulated the bank’s bold vision: to be the undisputed leader in the Mortgage sector, providing livable and affordable homes for Nigerians, driven by an unwavering commitment to customer satisfaction.
Understanding market dynamics…
A thriving housing sector has far-reaching positive impacts on the broader economy. Increased construction activity generates employment, stimulates demand for building materials and related services, and contributes to overall economic growth. Furthermore, homeownership provides individuals and families with stability, security, and a sense of community, contributing to improved social well-being and stronger communities.
AG Mortgage Bank Plc’s deep understanding of the Nigerian housing market dynamics, coupled with its robust financial infrastructure and expertise in mortgage financing, has enabled it to effectively channel M-REIF funds to eligible applicants, making a tangible difference in their lives.
By facilitating the provision of mortgage loans with potentially favourable terms, M-REIF helps to alleviate the significant upfront financial burden typically associated with purchasing a home. This can include aspects such as lower interest rates, reduced down payment requirements, and extended repayment tenures, making homeownership more financially viable for a wider range of income levels.
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What to know about M-REIF…
The core objective of M-REIF is to facilitate the provision of affordable housing by channelling funds through eligible financial institutions, such as mortgage banks, which then extend mortgage loans to prospective homeowners.
This collaborative approach between the government and private sector financial entities aims to reduce the financial burden on individuals seeking to purchase homes developed under the M-REIF framework. By providing a dedicated funding source, M-REIF encourages developers to focus on constructing affordable housing units, thereby increasing the supply and catering to a significant segment of the Nigerian population that often struggles to access suitable housing options.
M-REIF serves as a crucial financial catalyst, incentivising developers to undertake projects focused on affordable housing. The availability of a dedicated funding pool encourages investment in this critical sector, leading to an increase in the number of available housing units that are within the financial reach of a larger segment of the population.
The primary goal of M-REIF is to make homeownership a more attainable dream for Nigerians. By providing financial institutions with funds specifically earmarked for mortgage loans for affordable homes, the scheme directly addresses the affordability challenge, enabling more individuals and families to transition from renting to owning their own properties.
M-REIF operates by providing eligible financial institutions, primarily mortgage banks, with the necessary capital to extend mortgage loans to qualified applicants. These loans are specifically targeted towards the purchase of homes developed under the M-REIF framework, ensuring that the funds are directly utilised for their intended purpose of promoting affordable homeownership.
Offering attractive terms…
Celebrating 20 years of leadership, AG Mortgage Bank’s commitment extends beyond just providing financing. The bank’s deep understanding of the Nigerian housing market, coupled with its proactive adoption of innovative schemes like M-REIF and the Help-To-Own (HTO) scheme, in partnership with Family Homes Funds Limited, positions it as a trusted partner for Nigerians seeking to own their homes.
AGMB understands that the initial financial burden can be a significant hurdle for prospective homeowners. To address this, the bank offers attractive terms under both M-REIF and HTO, requiring a minimum down payment of just 20 percent and providing mortgage loans at a competitive interest rate of 12 percent. Furthermore, the flexible repayment tenure of up to 20 years provides borrowers with manageable monthly obligations, fostering sustainable homeownership.
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Partnering for ambitious target
AG Mortgage Bank is not just envisioning the future of African housing; they are seizing it. With an audacious goal to create 300,000 mortgages within six years and scale to serve one million customers, the bank’s recent partnership with Invest Africa marks a pivotal step towards this ambitious target.
As AG Mortgage Bank celebrates its 20th anniversary, it played host to Carrington Chantele, Managing Director, Invest Africa and her colleague, Vimbayi Kays, in a powerful alliance that promises to reshape the continent’s mortgage landscape.
The bank’s pursuit of excellence resonated strongly with Chantele, who expressed Invest Africa’s keen interest in forging a dynamic relationship with AG Mortgage Bank Plc.
More mortgage products and real estate financing solutions in the offing
Also, in a bid to deepen the mortgage sector and enhance product relevance in the real estate financing space, AG Mortgage Bank recently convened a focus group session aimed at re-examining a suite of mortgage and real estate financing products it is set to introduce into the market.
Stakeholders, including representatives from the banking sector, insurance, fund managers, and the Financial Institutions Training Centre (FITC), emphasised the vast opportunities in Nigeria’s mortgage sector, asserting that the market remains largely untapped despite growing population demands.
The programme was designed to gather critical market feedback on product acceptability, broaden perspectives beyond the traditional banking lens, and ensure market alignment of the offerings, according to Anyogu.
“We are bringing a number of mortgage products and real estate financing solutions into the market. This focus group has been put together to review and re-express these products and speak to us about their likely acceptance in the marketplace,” he said. “Often, when you develop products, you end up speaking to yourself. But by engaging the market directly, we can evaluate how well these products will be received. That’s exactly what we are doing here today.”
Addressing the issue of low mortgage awareness, Anyogu noted that the bank is tackling the challenge through an ongoing and aggressive sensitisation campaign.
“One of our strategies has been organising what we call ‘meet and greet’ forums, where we bring together reputable property developers and those who want to buy properties. We’ve hosted these sessions in Lagos, Calabar, and most recently in Kano,” he said, adding that several more are planned before the end of the year. “These platforms have proven very effective in raising awareness.”
The Bank is also reaching out to Nigerians in the diaspora through targeted media channels to ensure the message on mortgage accessibility is widely disseminated.
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“We believe awareness will grow incrementally. What started as a small effort from our end will, with time, become a national platform as more players join in.”
On the nature of the products being introduced, Anyogu clarified that while the bank is discussing 10 mortgage products, they are not entirely new but rather upgraded and tailored to meet specific market needs.
While we have made significant strides, our goal now is to deepen our mortgage portfolio, which is a key reason why we have convened today’s session. Expanding our in-house portfolio has direct implications for the underwriting standards we will adopt. These standards will address fundamental principles as well as the defining features of the mortgage products under consideration.
“We are discussing 10 product types today. While none of them is completely new, because there is truly nothing new under the sun, we are enhancing the features of these products to better reflect the diverse needs of our customers,” he explained. “No two people are alike, and if one product doesn’t fit, another likely will. This focus group will help us identify what appeals to different segments.”
He added that the updated products would be added to the bank’s product basket, ensuring that any prospective customer finds a solution suited to their unique needs.
