The Nigerian government recently gave approval for the disbursement of the 300 million dollar World Bank loan for the implementation of the company in hopes of reviving the mortgage industry in the country.
“Since the launch, the company has embarked on its capital raising, we have also concluded the tier 2 loan from the World Bank and I can say that the tier 1 capital raising was successful,” Sonnie Ayere, CEO of the Nigerian Mortgage Refinance Company told CNBC Africa.
Nonetheless, the company which is expected to increase access to affordable housing for the average Nigerian and revolutionise the housing finance sector has experienced some delays as many expected it to have fully begun operations.
“We are expecting to operationalise by the end of June, that’s the promise we gave to the Nigerian public and that was given by the minister. We are on track to achieve that, the board has been constituted, there’s been several board committee meetings etc, so there’s a lot going on,” he said.
Nigeria currently has a deficit of over 17 million houses and the World Bank estimated the cost of bridging that gap to 59.9 trillion Naira, highlighting the significant untapped potential of the country’s real estate sector.
“It’s not going to eradicate it (the deficit gap) completely but it will help significantly. As you know, we’ve talked about other issues that need to be reserved, foreclosure tightening, etc. We are working on that,” he added.
While many Nigerians are hopeful that the mortgages will be single digits, Ayere believes that the likelihood of that depends substantially on the monetary policy going forward.
“So, if for instance MPR rates go down to six per cent like it was before it took that dramatic rise, if it goes back to six per cent, then you can expect mortgages will fall within the single digits. As you know, subsidies are not very sustainable. What we want to have is a model that from day one, is sustainable and that is why we wanted something that to a certain extent is market driven,” he explained.