The enthusiasm that greeted the launching of the Nigerian Mortgage
Refinance Company (NMRC) by the Federal Government in January 2014 is
fast fading away, leaving mortgage operators and real estate investors/
developers with worries.
Though a public-private partnership between the government and the
private sector, NMRC was conceived as a secondary mortgage institution
aimed to revolutionise the country’s mortgage system by providing the
needed liquidity in the system for long term loans at low interest rate.
The government had at the launch of the company raised the hope of
many Nigerians who hunger for mortgage loans for homeownership by
disclosing that “NMRC is expected to pull down lending rates for housing
from the current spread of 20 to 23 percent to the low double digits
or, at least, to a high single digit”.
Ngozi Okonjo-Iweala, the minister of finance and coordinating
minister for the economy, who gave this hint at the launch, added that
“this company is being set up to help lower the funding cost of
mortgages and promote the affordability and availability of good housing
for working Nigerians by providing mortgage lending banks’ increased
access to liquidity and longer term funds in the market”.
Only recently, Charles Inyangette, the new NMRC CEO, told BusinessDay
on the sidelines of a workshop for mortgage bank operators that the
company operated as a private sector-led institution, relying on the
market to determine interest rate on mortgage loans, meaning that the
rate that applies to commercial loans also applies to its mortgage.
“As it is today, we cannot meet the single digit interest rate until
we are able to reach that point where the market allows it”, the CEO
explained, adding, “right now, we are working under market conditions
and, over time, as the market deepens and grows, the issue of single
digit interest rate would be expected”.
Reacting to this in a telephone interview in Lagos, Anthony Owuye, a
finance expert, described government’s present stance as double speak,
stressing that NMRC was conceived primarily as a very important
intervention in the mortgage market to provide cheap funds as against
the commercial loans offered by commercial banks.
“This is the reason many foreign and local institutions invested in
the company and I think that the company has enough capital, with all
the foreign interests in it, to provide for single digit interest rate
which was the main attraction to the company”, he said. Inyangette said
the company needed a lot of clarity on this issue of interest rate,
wondering that people thought NMRC was single digit “and this is even
among the practitioner- group which is not the case; at no point was it
said that the company was going to be single digit.
From the onset, it was said that the rate would be-market driven. So, sensitisation is very important”, he emphasised.
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