NMRC and waning optimism
When an idea, a concept or an establishment comes on very high pedestal like the way the Nigerian Mortgage Refinance Company (NMRC) did about 36 months ago, it usually ignites in potential beneficiaries hope and expectation of no mean measure.
People become all the more optimistic if such an idea comes from great and credible minds who, from all intents and purposes, give impression that they mean well and that the idea is out to salvage a collapsing system that should ordinarily provide succor to the people.
When the NMRC came the way it did, mortgage industry operators were quite optimistic of a viable mortgage market. They were all the more hopeful when it was announced that the company would commence mortgage refinancing just a few months after it was launched.
NMRC is a government-midwifed but private sector-led secondary mortgage institution which, by reason of its establishment, is aimed to refinance mortgages that will be created or originated by primary mortgage banks (PMBs).
In the beginning, when the company was launched and took off with a $300 million grant from the World Bank, it was expected to increase liquidity in the mortgage system by providing cheap and long term funds, reduce interest rate to single digit, increase the country’s housing stock by 75,000 annually, and create 300,000 direct jobs.
As a secondary mortgage institution intermediating between long term deposits and short term funds, the company would also be providing long term funds to mortgage lenders. It would issue long term bonds in the Nigerian financial market as efficiently as possible and channel the proceeds to member-institutions at a competitive rate.
The hope was that when the company commenced mortgage refinancing, it would bring to end, or reduce to the barest minimum, the huddles posed to mortgage lending to real estate.
“For the primary mortgage banks (PMBs), it is a new dawn, because this is going to revolutionise mortgage banking operations; the new refinancing company acting as a secondary mortgage institution will buy off mortgages originated by the PMBs”, explained Anthony Owuye, a mortgage banking expert.
Similarly, the president of the mortgage banking association of Nigeria (MBAN), Femi Johnson, was quite optimistic about drop in interest rates, stressing that rates would definitely drop but would not be immediate.
“Before we really put our arts together to get the engine running, it will take a while and within this period, the interest rate is not going to drop but once the engine starts to flow and run, definitely the rates will drop because we are bringing more and cheaper funds into the system”, he assured.
CHUKA UROKO