Banks in Nigeria are now targeting the Nigerian migrant community abroad with the newly established Ministry of Finance Incorporated (MOFI) Real Estate Fund (MREIF) for mortgage or home loans.
MREIF, established by MOFI, the investment arm of the federal government, is designed to tackle challenges in the housing sector by addressing both supply and demand constraints faced by developers and home buyers.
It is a home loan for employees and self-employed Nigerians in Nigeria and in Diaspora with a maximum loan amount of N100 million at 12 percent interest rate over 20 years with 20 percent equity contribution.
One of the banks offering this as a home loan to Nigerians abroad is Stanbic IBTC Bank, a leading deposit bank in Nigeria, renowned for its friendly mortgage and other credit facilities.
To give out this loan, Stanbic is looking for customers earning N500,000 as a minimum salary per month and the equivalent for Diasporans, while self-employed customers should have a minimum of N100 million annual turnover.
Read also: What you need to know about MOFI real estate fund and its benefits
In a fact sheet shared by a vendor, Agent Jake, on his X (formerly Twitter) handle, Stanbic says the loan amount could be as low as N10,000, whereas the maximum amount is N100,000, assuring that it finances any excess above the maximum amount.
“All existing parameters to apply to include stop-gap facility option, where required, while awaiting the MREIF disbursement,” the fact sheet says, adding that while the currency for this transaction is the Naira, the minimum property value to be applied for is N12.5 million.
It adds that the 20 percent equity contribution could come from 25 percent of the loan applicant’s retirement savings account from his Pension Fund Administrator (PFA).
“Life and Property Insurance cover is mandatory; the maximum loan tenor is 20 years for employees and seven years for the self-employed. For employees, the loan must mature when they are 60 years old or on their official retirement age,” the fact sheet says.
It reveals that the loan attracts facility fees, including 1 percent management fee and another 1 percent advisory fee, adding that a joint application is allowed with a spouse only.
Jake described the Fund as a nice development, advising the diasporans to take advantage of the opportunity that the fund offers. But this advice drew mixed reactions from the migrant community.
“That’s the best deal I’ve ever seen, interest rates are closely related to inflation rates, our inflation rate in Nigeria today is over 28 percent, an interest rate of 12 is a very sweet deal that everyone capable should rush,” Jake noted.
While some welcomed the idea and expressed interest, others dismissed it as being too expensive, citing the 12 percent interest rate and the 20-year tenor, which they noted are too high and too short, respectively.
Many of them took to their Twitter handles to express how they view the mortgage offer. According to @cosmos_lee, “This is a very good one to be honest (tbh), but if my maths is ‘mathing,’ say I borrow 50 million at 12 percent per annum, I would be paying back over 135million in interest for a 30-year period?”
Read also; MOFI, others double down on delivering single-digit mortgages to federal workers
In his own reaction, @compoundingnaira notes that 12 percent for loan additional 2 percent for fees, gives 14 percent total for the loan, pointing out that any serious diaspora in North America should be able to get a 6-8percent loan and with Europe at a cheaper rate, he doesn’t see this being a hit with the diaspora.
Another Diasporan, @JayKezie, counters @compoundingnair, saying that no bank in North America will give an immigrant a mortgage to buy a property in Nigeria, adding that interest rates are relative to the inflation rate. “North American banks can offer even 4 percent interest rate because the inflation rate is sub-2 percent while Nigeria’s inflation rate is 33 percent. So, 12 percent loan is cheap,” he said.
“Canada’s inflation rate is 1.9 percent, up from 1.7 percent previously. Bank of Canada interest rate is currently at 2.75 percent. A simple google search will help,” he added.
Someone like @Kadupee does not understand why everything Nigerian is different in a negative sense. He requests, “Someone should please make me understand why borrowing is so expensive in Nigeria and most African countries. 12 percent on a 20 percent down payment, when you have USA at 6-7 percent. CBN needs to do better.”
