The refinance company which is supported by the World Bank was launched to provide long term funds to mortgage lenders. Despite the fact that the country’s real estate sector has the capacity to drive Nigeria’s economy, various problems have stunted the growth of this sector.
“There has been some progress made. One of the things that you will notice recently is that the Nigerian economy has gone through the rebasing process,” Damilola Akindolire, General Manager of the AlphaMaed Property Development Company.
The company was launched in line with President Goodluck’s Transformation Agenda and aims to boost the country’s real estate sector by enabling primary mortgage banks and other financial institutions to offer mortgage facilities to Nigerians at affordable prices.
“What this [the rebasing of the economy] means is that, it’s going to help the NMRC to raise the required funds to capitalise the Nigerian mortgage industry and refinance existing mortgage assets,” he said.
According to him, more activity is expected in Q3 and Q4 of this year as there are plans to conclude the second tier capital and the NMRC is expected to raise another 50 billion in bonds from the Nigerian markets. Nonetheless, with a population of over 170 million only about 20,000 of them have mortgages, private money needs to be used together with public money.
“That simply means that an average decent house could go for between 10 and 12 million naira so you would need quite a substantial sum of money to cater for just the existing mortgages and it will probably take two years to even mop up the existing system given the capitalisation system of the Nigerian refinance company,” he explained.
Akindolire believes that the NMRC alone cannot attend to the mortgage refinance needs of the country, thus, the nation will see multiple refinance companies over the next years.
“If the target is to create 200,000 thousand mortgages within the next five years, then Nigeria would need two trillion naira to make up that difference within the next five years,” he added.