Insurance industry’s non-active participation seen slowing mortgage sector growth
An insurance industry that is not as active participant as it should be has been identified as one the problems slowing the mortgage economy growth in Nigeria, leading to an abysmally low homeownership level in the country.
For some reasons, in this country, in spite of everything the people have learnt, policy is shaping the industry whereas, in most economies, it is the other way round—industry shapes policy because people in the industry are the ones implementing the policy every day.
“The mortgage industry in the US has been robust for decades; it is with continued activity. I am not saying we should replicate what happens in the US here, because Nigeria has its own unique characteristics which we must recognize and respect”, Adenike Fasanya-Osilaja, a mortgage and finance consultant, noted in an interview with BusinessDay in Lagos.
Fasanya-Osilaja, a US resident, pointed out however that what the mortgage players in Nigeria should do was to make the US system a base-line, explaining that this system represented the global standard.
“We have to start learning that system and adapt it to meet our own unique cultural system and unique needs which is why we have come back to Nigeria to start consulting and playing a role in developing this big system”, she said, adding, “we want to lay a very good foundation to ensure that what happened in America in 2006 with sub-prime mortgage crisis does not repeat itself here”.
The mortgage consultant sees the Nigerian Mortgage Refinance Company (NMRC) as a big possibility that can change and shape the mortgage system in the country, adding that it could also be an umbrella for the system.
One of the high points of the company, as a secondary mortgage institution is its long term, low rate global funds and Fasanya-Awoshika says the reason for this is because the mortgage industry here is not yet buoyant, “but NMRC, whether it is succeeding now or not, can be a significant tool in achieving that”.
In her opinion, the mortgage industry should be shaping NMRC and not NMRC shaping the industry, advising that the Central Bank of Nigeria( CBN), through the NMRC, should be listening to the voice of the industry. “Experience has proved to me that the CBN is quite ready to listen and learn. The problem here however, is that the industry has been rather passive”, she noted.
She advised further that the mortgage industry has to be standardized so that global players, from global perspectives, could view the local industry from the perspective of NMRC and mortgage banking association of Nigeria (MBAN) and see something to hold on to in their investment decisions.
She posited that the Nigerian economy, despite the current challenges, could conveniently support the growth of the mortgage industry in the country, noting that Nigeria is one of the fastest growing economies in the world for no reason other than that the talent resource here is amazing.
“What we need to understand however, is that there is time for competition and there is also time for association and each is as critical as the other”, she said, stressing that “the only thing that will stop this industry from growing is over-regulation by people who are not in the industry and therefore will not understand the effect of their policy on the actual market ; this is why we preach deregulation of this industry”.