Housing Ministry Targets Capital Market Funding to Alleviate Crisis
In a bid to overcome liquidity risks and secure long-term funding for affordable housing, the Federal Government and the Mortgage Banking Association (MBAN) are exploring innovative avenues, prioritizing capital market financing. Housing and Urban Development Minister Ahmed Dangiwa, MBAN President Ebilate Mac-Yoroki, and NGX CEO Temi Popoola recently convened in Abuja to deliberate on strategies addressing the dearth of mortgage loan facilities.
With Nigeria’s mortgage sector contributing a mere 0.38% to the GDP, compared to countries like South Africa and Malaysia at 40%, the leaders aim to substantially increase the contribution of the mortgage banking and housing finance sector to the nation’s economy. Discussions revolved around potential solutions such as securitized crowdfunding on the NGX platform to fund viable housing projects and exploring convertible bonds and insurance agencies to cater to the demand side.
Minister Dangiwa emphasized the need for effective frameworks, involving all stakeholders, to deploy and promote these innovations. The groundwork for these discussions was laid at the 20th edition of the MBAN-organized CEOs retreat, focusing on advancing sustainable and affordable housing finance in Nigeria.
At the retreat, Minister Dangiwa urged CEOs to develop creative mortgage products, considering the economic challenges in Nigeria. He emphasized the importance of viewing affordable mortgages as a moral imperative, ensuring accessibility for low- and medium-income segments.
MBAN President Mac-Yoroki called for the establishment of special courts in all states to handle mortgage and housing-related matters and urged amendments to laws affecting housing and housing finance. He stressed the need for a central housing database and appropriate legislation recognizing electronic print-outs of title documents for efficient trading of mortgages.
Mac-Yoroki advocated for the enactment of the Model Mortgage and Foreclosure Law, urging state governments to address foreclosure issues and establish mortgage and foreclosure authorities. Additionally, he proposed the creation of a housing commission or committee comprising key stakeholders to meet quarterly and review housing matters.
The mortgage operators also called for an appropriate law recognizing electronic print-outs of title documents as prima facie evidence for house ownership through the Central Security Clearing System (CSCS) to facilitate electronic trading of mortgages. Mac-Yoroki highlighted the importance of addressing issues that render certificates of occupancy and deed of assignment ineffective for electronic trading, emphasizing the urgency for reforms in the sector.
