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Operatives urge regulatory measures to stimulate mortgage sub-sector

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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. The association plans 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).

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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.

Mortgage Banking Association of Nigeria President, Niyi Akinlusi

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.”

The association further appreciated the current empathetic support by CBN/NDIC, but appealed to the regulatory agencies to adopt more responsive outlook to the discharging of their oversight responsibilities on the mortgage banks, especially in the application of sanctions on issues identified during on-site examination exercises.

Earlier, CBN’s Deputy Governor, Financial Systems Strategy (FSS 2020), Mrs. Aishah Ahmad, represented by the Director, Other Financial Institutions Supervision Department (OFISD), Mrs. Nkiru Asiegbu, advised primary mortgage banks to take the required steps to optimise the adoption of technology with a view to adapting their business strategies to the changing customer demography and expectations.

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She said banks should also collectively develop a road map towards stronger profitability outlook for the industry.

Speaking, the Managing Director/CEO, NMRC, Mr. Kehinde Ogundimu, re-affirmed NMRC’s deep commitment to the sustainability of the sub-sector by addressing various issues and bottlenecks clogging the wheel of progress, such as the foreclosure bil. Currently, six states, namely Kaduna, Lagos, Ekiti, Edo, Nasarawa and Ogun States have passed their laws.

Similarly, FMBN Managing Director/CEO, Ahmed Dangiwa, reiterated that partnership and collaboration would be required to overcome the negative impact of the pandemic on the mortgage banking.

He also affirmed the commitment of FMBN to work with MBAN and other stakeholders to promote improved service delivery in the National Housing Fund (NHF) scheme.

The Chairman, MWFL, Mr. Sonnie Ayere, said the company is fully operational, and willing to support PMBs with short-term money market instruments towards creating mortgages, which would be refinanced by NMRC.

He therefore urged PMBs to take advantage of the un-tapped opportunities, such that more Nigerians would have greater access to mortgages for affordable housing.

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