The long wait for NMRC operations

When the Federal Government launched the Nigerian Mortgage Refinance Company (NMRC) in January this year as a secondary mortgage institution that would refinance the primary mortgage lenders and create long-term loans at low interest rate, it did not only excite the mortgage system in the country, but also raised hope and expectation that an end was near for the country’s mortgage woes.

Though a brainchild of the Federal Government, NMRC came as a clear departure from the Federal Mortgage Bank of Nigeria (FMBN) because of the private sector involvement in its composition and operations.

By way of shareholding in the company, unconfirmed report has it that mortgage banks and the Mortgage Banking Association of Nigeria (MBAN) will be controlling 50 percent of its shares, commercial banks 20 percent, Ministry of Finance 20 percent, and International Finance Corporation (IFC) 10 percent, all making up 100 percent.

More than anything else, this shareholding structure which makes it almost a private sector enterprise gives Nigerians the hope and conviction that the company is not on the same path with FMBN and its younger sister, the National Housing Fund (NHF), both of which are government’s baby girls.

Nigerians were told at the launch of the company that besides creating the needed liquidity in the mortgage system, through the operations of the company, 750,000 homes were to be produced annually; interest rate on a 10-year bond would be 10 percent; interest rate on a 20-year mortgage would also be 10 percent, while mortgage in the country would be standardised at 20 years.

Another highpoint of the company highlighted at the launch was that it aims to increase the number of mortgages from 20,000 at the moment to 200,000 in five years, meaning that the country needs to create 200,000 new mortgages within that period.

Twelve months down the line, like the little boy Phillip Pirrip (Pip) in Charles Dickens Great Expectations, Nigerians are getting worried as to when this celebrated ‘benefactor’ will arrive to end their long and pervasive hunger for homeownership through long-term and low-rate mortgage loans.

We are neither prophets of doom nor pessimists, but we are of the view that the preparation for the effective take-off of this company is taking time long enough to raise concerns and also make people ask if this is another ‘Great Expectations’ which raised and sustained appetite but only ended it in jitters.

It beats our imagination that a company like NMRC which has heavy private sector involvement is taking so long to get off the ground considering that Nigeria is blessed with some of the world’s brightest private sector operators who, home and abroad, are success stories in their chosen fields.

Recently, the minister of finance and coordinating minister for the economy, Ngozi Okonjo-Iweala, disclosed that so far, NMRC has raised N7.05 billion as shareholders capital, adding that the company would also raise funds in the capital market through the periodic issuance of Federal Government guaranteed bonds.

Though this, for us, for many Nigerians and the mortgage system, is cheering good news, we are amazed that with this kind of resource, there are no stories in town about one or two mortgage applicants being pre-qualified for loans originating from the operations of NMRC.

We may not know all the operational modalities of the company, but we wonder why every bit of information on the workings of the company comes mostly from government instead of the private sector stakeholders who ought to have taken control with little or no influence by the government.

Probably more than its promoters, we believe in NMRC; we even believe more in its management by private sector operators, but at no better time than now when the economy of the country is looking south do we want the government to see the company’s potential as a turnkey for our present challenges. The long wait for its benefits belies the sincerity of its purpose.

We were gladdened when government identified housing along with agriculture as growth areas that it would give greater attention to in the face of falling oil prices. Given that mortgage is a major driver for the housing sector growth, we consider no investment too much to make NMRC take off effectively, and in our candid opinion and advice, the time to make that investment is today.