The Nigeria Mortgage Refinancing Company (NMRC) reported Full Year 2015 results that showed profits increased by 201 percent to N482.5 million from N160.1 million in the earlier period.
But how did they do it considering the company which aims to be Nigeria’s version of U.S.A mortgage refinancing giants Freddie Mac and Fannie Mae, has mostly not bought or refinanced mortgages from Nigerian primary mortgage institutions (PMIs).
Business day’s analysis of the firms results show that the profits largely come from the placement of inflows from the World Bank/IFC IDA credit of $300 million, with banks to earn interest.
Placements with banks surged to N14.15 billion in 2015 from zero in 2014, while Investment securities also increased to N15.32 billion from zero in 2014.
Mortgage refinance loans on the other hand were however only equivalent to N1.88 billion or 4.8 percent of total assets for the period.
“Part of the money from the international finance corporation IFC has come and it is part of it that they are placing with banks, which is responsible for the upsurge in profits,” said an industry expert who does not want his name mentioned because of the sensitivity of the matter.
The 2015 audited financial statement of NMRC showed net interest income increased by 256.68 percent to N2.02 billion while Interest income moved by 356.57 percent to N3.13 billion.
A second industry source also said part of the money meant for refinancing is also being reinvested adding that it is a savvy investment move.
NMRC has disbursed close to N2.6 billion mortgage portfolio to four of its member institutions/primary Mortgage Banks, according to Charles Inyangete its MD/CEO in a June 2016 newsletter.
Beneficiaries include Imperial Homes Mortgage Bank Ltd, Trustbond Mortgage Bank Plc, Homebase Mortgage Bank Ltd, and SunTrust Savings and Loan.
The number is a drop in the bucket for Nigeria’s 17 million housing deficit estimated to be bridged with some N59.6 trillion.
The primary business of NMRC is mortgage refinancing through its mortgage lending member institutions.
As a liquidity facility Company, NMRC provides long term funds for mortgage refinancing, the objective being to make home ownership affordable.