-Danlami Nasir Isah
The assets of mortgage banks rose by N56bn from N315.48bn as of the end of November 2019 to N371.66bn as it stands at the end of September 2020.
This was contained in a report obtained from the Central Bank of Nigeria on its report on ‘Primary mortgage banks’ accounts and assets showed that the lenders’ assets had continued to record moderate growth over the years.
The CBN disclosed in its third quarter economic monthly report for 2020 that under its development financing, it approved N200bn as mortgage financing to Family Homes Fund Limited.
The fund is expected to fast-track the construction of 300,000 homes across the country within the next five years and help create up to 1.5 million direct and one million indirect jobs.
The National Bureau of Statistics, NBS had earlier disclosed that the real estate sector grew by 9.15 per cent in the fourth quarter of 2020.
The NBS stated in its Gross Domestic Product report for Q4 that the sector contracted by 3.55 per cent in the full year 2020.
Part of the report read, “In nominal terms, real estate services in the fourth quarter of 2020 grew by 9.15 per cent, or 6.64 per cent points higher than the growth rate reported for the same period in 2019 and 17.21 per cent points when compared to the preceding quarter.
“Quarter-on-quarter, the sector growth rate was 27.34 per cent, while the annual growth rate stood at –3.55 per cent for 2020 compared to 4.23 per cent in 2019.”
It stated that the contribution to nominal GDP in Q4 2020 stood at 6.4 per cent as against 6.45 per cent recorded in the fourth quarter of 2019 and higher than the 5.6 per cent recorded in the third quarter of 2020.
Why regulatory intervention is key to mortgage sector
Meanwhile, Mortgage operators have appealed for regulatory-induced fiscal and monetary measures that would stimulate the sub-sector towards sustainable development.
They also implored the Central Bank of Nigeria (CBN) to fast-track implementation of the Mortgage Interest Draw-Back Programme (MIDP), together with other policy measures that would moderate the cost of funds to single digit, on a consistent and sustainable basis.
The operators, under the aegis of the Mortgage Banking Association of Nigeria (MBAN), made the call in a seven-page communiqué after its Chief Executive Officers (CEOs) retreat in Lagos recently.
The association said they also plan to engage the CBN on specific modalities required to facilitate policy implementation, monitoring and impact assessment.
The Annual Retreat for CEOs was held via Zoom and physically, with participants drawn from the mortgage banks, mortgage brokerage companies, CBN, Nigeria Deposit Insurance Corporation (NDIC), Federal Mortgage Bank of Nigeria (FMBN), Nigeria Mortgage Refinance Company (NMRC) Plc, Mortgage Warehouse Funding Limited (MWFL).
The retreat with the theme, “Developing a Resilient and Sustainable Mortgage Banking Sub-Sector Beyond COVID-19 Pandemic: The Associated Risks, Challenges and Opportunities,” deliberated on the potential areas that could boost the resilience of the sub-sector to withstand unforeseen events such as the COVID-19 pandemic, and ultimately enhance the continued sustainability of the industry.
Specifically, MBAN urged CBN as part of COVID-19 palliatives and intervention, to provide the residual equity capital of 75 per cent that would complement the existing share capital of 25 per cent already subscribed by NMRC for immediate take-off of Nigeria Mortgage Guarantee Company Plc (NMGC) due to its envisaged impact on the mortgage banking in the country.
“This arrangement would include a sunset clause that the shares would subsequently be taken out by the mortgage banks/other stakeholders in the future. This concrete step would have assured the effective take-off of operations by NMGC, in view of the effects of pandemic on the capital raising for the company through shareholding investments by mortgage banks,” MBAN said.
The document, endorsed by MBAN President, Mr. Adeniyi Akinlusi and Executive Secretary/CEO, Mr. Kayode Omotoso, advised banks to embrace technology. “Automation would be the best way to ensure competitiveness and efficiency in the sub-sector. Therefore, investment in technology to drive mortgage loan origination processes has become very imperative for the mortgage banks and brokerage companies.”