Boost for mortgage market as NMRC secures $200m facility to tackle liquidity squeeze

…puts women, informal sector, low-income borrowers in focus

The mortgage market in Nigeria received a boost recently as Nigeria Mortgage Refinance Company Plc (NMRC) secured $200 million funding from the United States International Development Finance Corporation for affordable mortgage financing.

The funding, according to the authorities of NMRC, comes as part of a $228 million blended financing transaction arranged by MiDA Advisors and Stanbic IBTC Capital—a member of Standard Bank Group.

The funding is aimed to bridge the liquidity gap in Nigeria’s mortgage finance market, and also to co-create a blended finance solution to mobilize long-term financing at scale.

“This transaction will include a $200 million loan from the US International Development Finance Corporation (DFC) and $28 million in financing sourced from local financial markets, making a total of $228 million long-term blended financing to NMRC,” Kehinde Ogundimu, chief executive of NMRC, explained in a statement obtained by BusinessDay in Lagos on Friday.

Ogundimu explained further that the transaction and strategic partnership with DFC would provide the needed liquidity to support the country’s quest to bridge the housing deficit while driving more equitable economic growth and development.

“The facility will be disbursed through on-lending to primary lending institutions, that is, commercial banks and primary mortgage banks, to refinance or pre-finance eligible mortgage loans to qualifying mortgage borrowers across Nigeria,” he added.

According to the National Bureau of Statistics (NBS), 63 percent of Nigerians are multi-dimensionally poor. Therefore, this kind of financing is expected to provide vulnerable population segments with access to credit facilities, including Nigeria’s large informal sector, low-income earners, and women who face extreme difficulties in their bid to own a home.

It is expected that approximately 20 percent of the loan will be allocated to informal and low-income borrowers, while an estimated 40 percent of the mortgages to be refinanced or pre-financed will be those underwritten to women as borrowers or co-borrowers.

Ogundimu commended DFC, noting that the funding was a clear proof of NMRC’s positioning as a key institution within the housing ecosystem.

“This transaction will certainly enhance our efforts to provide affordable long-term housing finance in a manner that will impact the overall sector. It shows that DFC and, indeed, other local and international financing institutions have a lot of trust in our capacity to manage long-term facilities that will make a tangible impact on the lives of Nigerians,” he noted.

“The keen focus on low-income earners, the informal sector, and women is indicative of the direction of our efforts. As an institution, we are committed to driving equitable access to housing credit facilities thus enabling vulnerable Nigerians to achieve their homeownership dreams,” he added.

Aymeric Saha, MiDA Advisors’ CEO, said they were pleased to partner with NMRC and Standard Bank to arrange another transformative housing finance solution that will impact over 6,000 households in Nigeria, saying that through the transaction, they were demonstrating, here again, the power of partnerships with Africa’s leading companies such as NMRC to tackle social infrastructure financing needs in the region.

“This transaction demonstrates the bank’s commitment to driving Africa’s socio-economic development through the facilitation of sustainable investment on the continent. We understand the needs and challenges of Africa’s people and continue to deliver innovative solutions to address them.

This is truly an incredible transaction with a positive impact to Nigeria and the continent,” Luvuyo Masinda, chief executive of Corporate and Investment Banking at Standard Bank Group, said.

Oladele Sotubo, chief executive of Stanbic IBTC Capital Limited, the wholly owned investment banking subsidiary of Stanbic IBTC Holdings PLC disclosed that Stanbic IBTC Capital was delighted to have worked alongside MiDA Advisors to facilitate this landmark financing aimed towards enhancing accessibility and affordability of mortgages in Nigeria.

“The objectives of the transaction are well within the Standard Bank Group’s purpose in driving Africa’s growth, and we are extremely proud to be party to the transaction,” he said.