A house is one of the most important thing in human life. It provides shelter, pleasure and security to a person in modern life. With the increasing large population year by year, the house demand is also increasing rapidly in Nigeria.
Different figures have been reeled out to estimate the housing deficit in Nigeria, whatever the real figure might be, a large number is accounted for by the economically weaker sections, for whom it is difficult to gather huge sums of amount at once to acquire a house.
Here comes the role of housing financial institutions. Presently, the government owned financial institutions involved in housing finance in Nigeria are the Federal Mortgage Bank of Nigeria (FMBN), Family Homes Funds, and the National Mortgage Refinance Company (NMRC).
These institutions have different roles to play in ensuring the provision of affordable housing to Nigerians. Though they have different mandates in the delivery of affordable housing, it is imperative that the heads’ of these institutions must see themselves as partners in progress rather than competitors in the housing finance sector.
The FMBN, NMRC and Family Homes Funds, all work on different aspects of providing affordable housing for Nigerians. Primarily, FMBN is a public sector institution focused on the role of providing mass housing and mobilisation of housing funds for the neediest in society.
FMBN provides long-term credit services to mortgage banks in Nigeria and other mortgage institutions at rates that will allow the mortgage banks and institution grant loans to individuals who want to acquire their own houses. It encourages and promotes the establishment and development of mortgage institutions at federal, state, local, and even rural levels.
It encourages the growth of secondary mortgage institutions to meet the housing needs of Nigerians. The Federal Mortgage Bank of Nigeria gives licensing authority for secondary mortgage institutions in Nigeria.
From time to time, the bank also introduces different innovative mortgage-related programs and products to achieve its mandates. The main goal of the FMBN is to advance home-ownership among every Nigerian by creating mortgage markets with a sustainable financing system.
Loans are directly accessed by Nigerian citizens through the National Housing Fund in accordance with the provisions of the NHF Act. The NHF is also to service the non-salaried informal populace.
On the other hand, NMRC as a secondary mortgage refinancing institution will inject liquidity from the capital market to support mortgage loans accessed through respective financial institutions.
NMRC refinances portfolios of mortgage & commercial banks rather than originating individual mortgages and will cater for financial institutions rather than individual borrowers.
The institution also helps to bring down the cost of mortgage loan by improving market efficiency, lowering cost of funds and allowing for longer repayment tenor period by financial institutions. NMRC as an intervention medium encourages access to mortgage loans from financial institutions at currently approximately 2.5% above where the Federal Government borrows.
Lower income households will benefit from direct jobs created by the construction of new housing units and services required to build a home and deliver it to the final customer.
While, Family Homes Funds will leverage its capital in facilitating access to affordable housing for millions of Nigerians on low to medium income groups. Through strategic partnerships with various players in the sector. The Fund also supports the development of a local content framework for inputs into the house building process, to ensure that up to 80 per cent of manufactured inputs are locally produced.
However, leveraging its capital to support the supply of new homes for families on low to medium income is only a means to an end. The key priority for the Fund is to take advantage of the opportunity a large scale house building programme offers to create jobs which are sustainable and offer families security, improved quality of life and hope.
It is clear that the potential in CEOs of government owned housing finance institutions working together is huge, and it has never been more important for these organisations to be close partners, because much more can be achieved collectively than with a single player.
Heads’ of housing finance institutions must build strong partnerships to maximise this opportunity, unnecessary tensions amongst what should be very strong partners must be eliminated. Instead bridges must be built, and they must work together to provide the safe, decent and affordable housing that Nigerians need.
People must be at the heart of why there must be synergy among these institutions to increase and improve their capacity to provide many more truly affordable homes.
Homelessness in our country is unacceptable, so housing finance institutions need to embrace and appreciate each other’s differences and move forward to deliver stronger, more innovative housing solutions together, by doing this they can make the most of their partnership and start to make a real impact on the well-being of Nigerians.
Source: Affa Dickson Acho