MRC begins operation Q1 2014 as Diamond Bank pledges to deepen mortgage business
Barring unforeseen hitches that may be beyond its promoters, the new Mortgage Refinance Company (MRC) being promoted by the Federal Government with $300 million seed capital from the World Bank will be opening for business by the first quarter of 2014.
Added good news to this is the pledge by the reinvigorated Diamond Bank Plc to assist Nigerian home seekers access housing finance, deepening the fledgling mortgage business in the country.
MRC which, according to the Federal Government, is an initiative aimed at boosting the mortgage industry in the country holds promise for 75,000 homes per annum and 300,000 direct jobs to be created from its operations.
Roland Igbinoba, president/CEO, Pison Housing Company Limited, who gave the hint about the commencement of the MRC operation early next year, stressed that the company has gone beyond the level of an idea, assuring that it would revolutionise the mortgage sector.
Sunnie Ayere, CEO, Dunn Loren Merrifield, and task manager, Federal Ministry of Finance, World Bank and International Finance Corporation (IFC) had, at a forum in Lagos, given insights into the operations of the company.
Ayere said the composition of the company’s shareholders include the Federal Government, international finance institutions like IFC, Shelter Afrique etc; Nigerian banks, primary mortgage banks (PMBs), and equity investors.
According to him, this initiative was also aimed at providing long term finance to primary mortgage lenders and issuing bonds in the capital markets.
“Its shareholding structure shows a strong leaning on the private sector which contributed 60 percent equity, the public sector 40 percent while IFC contributed 7.9 percent”, he added.
Anya Duroha, regional manager, Victoria Island of Diamond Bank, told BusinessDay in an interview in Lagos that as part of their retail strategy, they are interested in helping people to acquire homes and increasing the depth of mortgage business in the country.
“If you look at the housing market, we have over 16 million housing units deficit yet to be filled; we have only an estimated 10,000 new homes coming into the Nigerian market annually which emphasises the deficiency in the housing sector”, he noted, disclosing that over the years, the bank had been accumulating the necessary cheap funds that would enable them finance mortgage.
“Today, we have products that are targeted at enabling people acquire new homes, finance off-plan home purchase and even equity release”, he added, pointing out that “the mortgage market is one we are focusing on with the hope that it will grow as time goes on”.
Duroha disclosed that because of the various CBN policies which bars banks from owning non-core banking subsidiaries, they had to collapse their mortgage arm into the parent company.
“I can assure you that the work that was done by Diamond Bank Mortgages is still being done by Diamond Bank today and is even being done better and at a larger scale”, he assured.
“The problem of mortgage banking in Nigeria today is the unavailability of long term fund to finance mortgages. So, it is still expensive to access mortgage loans. But as I had said, we have been focusing on it for a long time and so, over the years, we concentrated first on growing cheap funds that are required to finance mortgages”, he added.
By: Chuka Uroko