How NMRC is innovating to build mortgage industry

Set up as a secondary mortgage institution that is private sector-driven with the public purpose of developing the primary and secondary mortgage markets, the Nigeria Mortgage Refinance Company (NMRC) has its work cut out for it.

The company has the mandate of, among other things, increasing liquidity in the mortgage system and lowering interest rate on housing loans. It is also expected to break down barriers to home ownership by providing liquidity, affordability, accessibility and stability to the housing market.

Armed with these in a very challenging business environment, the refinance company is left with no option but to innovate, believing that innovative ideas are needed to build the mortgage industry.

Besides pushing the mortgage foreclosure law with vigour such that, increasingly, it is gaining traction with many more states of the federation passing the law, the company has come up with what it calls Electronic Mortgage Assets Registry.

This has financial backing from the Work Bank and, according to Kehinde Ogundimu, the managing director and chief executive officer of the company, the registry is aimed to facilitate seamless transfer of real estate assets from an old to a new owner.

The company’s cost optimization measures is another innovative taken by its managers that has led to a significant reduction in all its expense heads. The impressive 2019 financial year which the company recorded is chiefly linked to this idea.

Through these measures, the company was able to grow its profit before tax (PBT) to N3.09 billion as at the end of its financial year ending December 31, 2019, representing a 60-percent increase in the ₦1.94 billion it recorded in the corresponding period in 2018.

Additionally, its earnings per share increased to N1.43, up from N0.93 recorded in 2018, making it possible for the shareholders to approve a dividend payout of ₦0.43 per ordinary share. Similarly, its gross earnings increased by 36 percent from ₦7.09 billion in 2018 to ₦9.62 billion in 2019 while total assets increased from ₦69.29 billion as at December 31, 2018 to ₦72.87 billion in the period under review.

On the basis of this performance, chairman of the company, Charles Adeyemi Candide-Johnson, assures that, even though progress is being made, the company remains committed to its mandate of making housing finance more accessible and affordable for Nigerians, particularly in an era when housing availability has come to play a critical role in mitigating the spread and impact of Covid-19.

This performance has also enabled the the CEO to look at 2020 with optimism despite the ravaging impact of coronavirus pandemic, “We will continue to do our best for the company and for the industry; this is the first time, since inception, that we are paying dividend. Our shareholders will be expecting the same feat this year. But we have to temper expectations with reality,” he said.

Before now, buoyed with the vision to be the dominant housing partner in Nigeria by providing liquidity and access to affordable housing finance, the company came up with innovative initiatives aimed to improve mortgage market transactions.

Housing/Mortgage Market Information Portal (MMIP) is one of such initiatives aimed to enable the company to gather data for intelligence and profiling of federal, states civil servants and informal sector operators (off-takers) for affordable housing.

This is an effective policy and decision making tool on land allocation, infrastructure and concessions. Former CEO of the company, Charles Inyangete, explained that “MMIP enables decision on creating polycentric cities in order to decongest major urban centres”.

Another initiative the company has had is the NMRC Mortgage Market System (MMS) which is a transformational change that integrates the entire housing market, covering construction finance, primary and secondary mortgage.

The system, made available to all players in the housing industry, has the benefit of removing duplications of effort in gathering data and documents; improving the turnaround time, reducing the cycle time of transactions and helping in making homes more affordable.

Described as a world class system that brings all players in the mortgage and housing market into a centralised technology ecosystem, MMS allows a systematic market to operate and concentration of activities to take place.

What the system seeks to achieve, besides bringing credibility and attracting investors to the mortgage market, is also to let players and sundry individuals know what is going on in the market. It creates a marketplace where there is information flow and people can see what is going on.

MMS also allows market operators to track all the activities within the construction industry. With it, they can see which developer is doing what and in which location. It also allows them to begin to compare prices and know which property is being sold and in which location. This way, the developers will begin to be more competitive in the way they do their developments.

For the mortgage banks, the new system allows them to begin to manage their own systems by themselves using the uniform underwriting standards, which NMRC has produced and, with that, they can evaluate their applications based on the underwriting standard.