To
begin with, if you are not aware that mortgage banks in Nigeria exist, and they
carry out the functions of any mortgage bank anywhere, then you might want to
do some reading and catch up. It might just leave you as surprised as it did me
– there are in fact dozens of
financial institutions across the country offering mortgage financing and
related services. I can see your eyebrows reflexively furrowing in doubt as you
read this, so I did some more research and came up with a list of the functions
carried out typically by mortgage banks in Nigeria. Here are these functions:
begin with, if you are not aware that mortgage banks in Nigeria exist, and they
carry out the functions of any mortgage bank anywhere, then you might want to
do some reading and catch up. It might just leave you as surprised as it did me
– there are in fact dozens of
financial institutions across the country offering mortgage financing and
related services. I can see your eyebrows reflexively furrowing in doubt as you
read this, so I did some more research and came up with a list of the functions
carried out typically by mortgage banks in Nigeria. Here are these functions:
1. To encourage and catalyse housing
delivery across Nigeria
A key point in the mission statement of the
Federal Mortgage Bank of Nigeria (FMBN) is that growth of primary mortgage institutions
must be encouraged to speed up housing delivery in all parts of Nigeria. To
this end, the FMBN serves as a risk guarantor, freeing up several private
lenders to provide mortgage services without significantly jeopardizing their
financial position or raising their risk exposure.
Federal Mortgage Bank of Nigeria (FMBN) is that growth of primary mortgage institutions
must be encouraged to speed up housing delivery in all parts of Nigeria. To
this end, the FMBN serves as a risk guarantor, freeing up several private
lenders to provide mortgage services without significantly jeopardizing their
financial position or raising their risk exposure.
2. To encourage local and foreign
investors to build a stake in the Nigerian housing sector
A key
part of the strategy employed by many Nigerian mortgage lenders is to mobilise
funds from investors within and outside the country for investment in the
housing finance space. This makes it easier for them to invest (and thus give
out more mortgages), while the investors rarely get their fingers burnt because
of the sheer need for housing and available market across the country.
part of the strategy employed by many Nigerian mortgage lenders is to mobilise
funds from investors within and outside the country for investment in the
housing finance space. This makes it easier for them to invest (and thus give
out more mortgages), while the investors rarely get their fingers burnt because
of the sheer need for housing and available market across the country.
3. To deliver mortgage financing for
provision of affordable residential houses around the country
A
mortgage is only useful if there exists the real possibility of paying it off –
in other words, if it is not affordable, then it is pointless. To this end,
mortgage banks in Nigeria are mandated to make sure than a good proportion of
the financing they offer goes toward provision of affordable housing, as
against just doing the dictates of the market, which can be weighted toward
whatever will bring the quickest and highest return.
mortgage is only useful if there exists the real possibility of paying it off –
in other words, if it is not affordable, then it is pointless. To this end,
mortgage banks in Nigeria are mandated to make sure than a good proportion of
the financing they offer goes toward provision of affordable housing, as
against just doing the dictates of the market, which can be weighted toward
whatever will bring the quickest and highest return.
4. To provide loans for the purpose of
erecting, purchasing or renovating houses
You can get a mortgage finance
facility for buying a property, or for building your dream home from scratch,
or even simply remodeling or renovating an existing home to suit your needs.
facility for buying a property, or for building your dream home from scratch,
or even simply remodeling or renovating an existing home to suit your needs.
5.
Catalyse house financing among low and medium income bracket of the population,
including the non-salaried and usually informal sector
Unlike
many other types of financing in Nigeria which are heavy on specific types of
acceptable employment, and thus often exclude the informal and/or unbanked
sector, mortgage financing in Nigeria is specifically directed at ensuring
inclusiveness of different types and levels of employment.
many other types of financing in Nigeria which are heavy on specific types of
acceptable employment, and thus often exclude the informal and/or unbanked
sector, mortgage financing in Nigeria is specifically directed at ensuring
inclusiveness of different types and levels of employment.