NMRC says capital market key to fixing Nigeria’s N130trn Housing deficit
The public and private sector stakeholders must work together to create a conducive policy and regulatory environment for a robust and transparent Debt Capital Market, the Managing Director of the Nigeria Mortgage Refinance Company (NMRC), Charles Inyangete has said.
According to him, this will attract more domestic and international investors, increase the market’s financial depth and strengthen its capacity to provide the multi-billion-naira/dollar long-term financing that is required to address the country’s housing deficit.
Inyangete is particularly of the opinion that the capital market remains key to fixing Nigeria’s N130 trillion housing deficit.
He was speaking recently at the FMDQ 2017 Nigerian Debt Capital Markets Conference with the theme “Positioning for Growth” recently in Lagos.
The conference was hosted by FMDQ OTC Securities Exchange. It brought together national and international influential financial market participants and industry experts that provided insights into current trends, development opportunities, case studies and expectation for the future of the Nigerian Debt Capital Market.
While acknowledging the positive strides being recorded by NMRC in increasing home ownership, he expressed concern that the company’s N440billion Bond Issuance Program to fund its refinancing activities is grossly inadequate when compared to an estimated N130trillion required to meet the housing deficit.
The Chief Executive therefore called for stakeholders to take actions that would help deepen the Debt Capital Market because of its pivotal role as an effective financing enabler of infrastructure development.
Specifically, he said that a more vibrant Capital Market is critical because it serves as the main source of funds that NMRC uses to make housing affordable for Nigerians.
By accessing long-term funds at affordable market rates to refinance mortgage loans that are provided by primary mortgage lenders, NMRC is able to increase liquidity in the market and in the process help extend the repayment period for mortgage loans for as long as 20 years. NMRC has used over N8billion raised from the capital market to refinance mortgages for several primary mortgage institutions.
“In connecting mortgages to the capital market, we are finding that we need to have the mortgages in the first place. So, housing stock is important and of course the structure to support housing is also crucial,” Inyangete.
“A housing deficit of 360billion dollars as estimated by the Center for Affordable Housing Finance in Africa requires Nigeria to invest annually in the region of 3.5trillion for housing. If you take the infrastructure such as power, water, access roads, to support that, you are looking in the region of 900billion annually”.
Such funding he said can only be sourced from the Capital Market whose foundation is anchored on transparency, accountability and strong governance.
Inyangete added that as a aompany with the mandate to link home ownership through mortgages to the capital market, NMRC has embraced the responsibility of driving a process of creating a mortgage environment that is suitable to promoting home ownership.
He stated that NMRC has built the Mortgage Market System (MMS), an eco-system that links the entire housing value chain which was launched earlier this year and developed an underwriting standard which the market is adopting as a basis for processing mortgages.
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