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13th AIHS: MBAN President, Akinlusi Speaks on Increasing Mortgage Access in Nigeria

The President of Mortgage Banking Association of Nigeria (MBAN), Niyi Akinlusi has revealed that the association has commenced strategies to increase access to mortgage for Nigerians, especially those in the informal sector.

While speaking with Housing News at the 13th Abuja International Housing Show in Abuja, Akinlusi said that they have identified key challenges mitigating access to home ownership in Nigeria.

According to him, with a staggering population of over 200 million people, and with current 2.5% annual population growth, Nigeria will in 2050 be one of the 3rd most populous countries in the world. But with 75% of them being 35 years and below, this population, according to Akinlusi, represents a growth opportunity for Nigeria.

‘’In a couple of years, the people in this population bracket will start their own families and will need jobs and houses to sustain themselves.

‘’We have 2 issues we must deal with. We must create jobs for these people, and we must also provide shelter for them. What can we do to solve these 2 problems? The easiest way is through housing. But now, how do we ensure these people have access to housing? 75% of Nigerians are either jobless or self-employed in the informal sector which includes agriculture.

‘’As an association, we are finding a way to ensure that young Nigerians have access to home ownership. We have come up with what we call underwriting standards for the self-employed in the informal sector working with stakeholders like CBN, NMRC, FMBN. We have approval for that.

‘’Because it is risky to give mortgage to self-employed people in the informal sector, mortgage banks do not want to underwrite mortgages for them unlike someone in formal employment whose mortgage can be deducted through income tax.

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‘’With CBN, we have decided to use the BVN which is a unique number identifier. This will be the major basis for ensuring that all bank accounts associated with the mortgage earner can be assessed for repayment. With that people cannot decide to default on mortgages. It will ensure discipline. It is a global standing instruction in order to reduce non-performing loans for mortgage and commercial banks.

‘’It also expands the reach of mortgages, especially to those in the informal sectors. It will increase access to mortgages,’’ he said.

He also said that they are working on how to reduce the barriers to access to mortgages. ‘’Before now, the barrier was not having access to long term funds. However with the successful operation of NMRC, we have access to funds in the capital market. The major issue now is the issue of interest rates at upper double digits which is not affordable for Nigerians, but there are ongoing plans with the CBN to offer single digits for certain amount in order to aid affordability,’’ he said.

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