• Wednesday, November 29, 2023
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Driving Nigeria’s mortgage refinancing system

Driving Nigeria’s mortgage refinancing system

Providing affordable housing in a country with an estimated housing deficit of 17 million units is no doubt an arduous task. And so, when a government realises the enormity of the task ahead and embarks on a mortgage refinancing programme, so much is expected of whoever is placed in charge of such a programme.

Charles Inyangete, the man who heads the Nigeria Mortgage Refinance Company (NMRC), a public sector-initiated but private sector-led initiative incorporated in 2013, surely understands that the job he has been called upon to do is no mean feat. How do you bridge 17 million housing deficit, which industry sources say requires unsurpassed liquidity?

And so, when he was appointed following the launch of NMRC by the Goodluck Jonathan administration – the first of its kind in the country, based on public-private partnership model – Inyangete came with a vision predicated on four pillars: innovation supported by robust IT; integrity, which is the hallmark of good governance; independence from undue external influence which will ensure the CEO and his team give their very best; and inclusion policy that treats all stakeholders fairly.

“I bring a style that is based on simplicity and a desire to achieve what we set out to do, not a leadership that is grandiose, not a leadership that sets out to say too much but a leadership that sets out to demonstrate by what we achieve,” Inyangete says in an interview.

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“And so, mine will be a very simple approach to things but it will be hands-on approach to things. I will roll my sleeves and get the work done and get involved in getting the work done without forgetting the strategic role that I’m supposed to play. But I also will not ignore the operational role in ensuring that the best strategies don’t just remain strategies but they get realised,” he adds.

His background and experience as a leading financial markets expert and real estate sector player, no doubt, come in handy in steering the affairs of the NMRC.

Prior to his coming to NMRC, Inyangete, who holds a PhD in Finance, had served as chief executive officer of Integrated Risk and Investments Services Ltd, non-executive director of Group Africa Growth Holdings, director of Exim Bank (Tanzania) Limited, and professor of Finance at the Institute of Financial Management in Dar Es Salaam, Tanzania.

The company he heads was established with the singular purpose of developing the primary and secondary mortgage markets by raising long-term funds from the domestic capital market as well as foreign markets in order to provide accessible and affordable housing in Nigeria. Its mandate is to increase the efficiency of mortgage lending by taking a lead role in proposing changes to the enabling environment for mortgage lending as well as by standardizing mortgage lending practices of financial institutions.

NMRC, a key component of the Nigeria Housing Finance programme, is expected to provide primary mortgage banks (PMBs) with access to long-term finance at an affordable interest rate, which in turn will enable mortgages to be issued by these institutions to Nigerians at longer tenors and affordable rates. The provision of mortgage loans at longer tenors will provide the average working-class Nigerian citizens an opportunity to buy a home and conveniently pay for it over a reasonable period of time without hassles.

Industry experts believe that accessible and affordable housing will stimulate growth of the economy in many key sectors – manufacturing, services and employment. But, more importantly, it will promote welfare of the citizens as it addresses one of the most basic needs of mankind – shelter.

And so, within the next five years the NMRC CEO expects that many Nigerians will have benefitted immensely from the activities of the company.

“In the next five years, we have projected that we will refinance close to the region of 400,000 to 450,000 mortgages for one segment of the market. When we go down to the lower segments of the market, we expect to refinance proportion larger than that number,” he says.

“So Nigerians can expect to see mortgages refinanced in their hundreds of thousands perhaps close to a million in that period, depending on the buoyancy and vibrancy of the market and their activities in that period,” he adds.

Provision of adequate housing has since become one of the indices for measuring the standard of living of a people. As such, Inyangete is committed to changing the face of housing in the country. He strongly believes that with the World Bank-approved concessional $300 million 40-year interest-free International Development Association (IDA) loan, NMRC has the financial wherewithal to make a difference in Nigeria’s housing sector.

He expects the lingering problems bedevilling the mortgage sector to disappear when NMRC fully takes off. Some of these problems include lack of focus of some PMBs on mortgage due to their pursuit of other more profitable ventures, lack of ability of PMBs to mobilize funds, among others. This is because with NMRC in place, PMBs can borrow, pay out their cash within short term and go back to borrow again and again, thereby increasing their own lending capacity.

With NMRC guarantees, the housing sector will be awash with more funds, such as the N5 trillion or so of pension fund in the market. With the low interest rate NMRC is bringing into the market, it is a win-win situation for both the PMBs and the consumers of mortgage.

Contributed by Bashir Ibrahim Hassan