FEC okays $300m World Bank loan to boost mortgage financing

Sequel to a memo brought to the Federal Executive Council by the Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, the Council on Wednesday approved a loan facility of N300 million to be accessed from the International Development Association to boost mortgage financing in the country.

The approval was granted to facilitate bridging the nation’s housing sector, the Minister of State for Finance, Yerima Lawan Ngama, told State House correspondents during post-Cabinet meeting.
Ngama said the objective of the Nigeria housing finance project is to increase access to housing finance by deepening the primary and secondary mortgage market in Nigeria.
According to the Minister, the housing demand in Nigeria has expanded rapidly due to current urbanization trends, putting the annual demand at an estimated 700,000 units.
He said this is far above the current production level of below 100,000 units.
Ngama said: “Council approved that we access $300 million from the International Development Association, which is a soft borrowing for developing countries from the World Bank.
“This facility is going to be used to meet the government’s objective in the proposed housing finance project.
“The Nigeria housing finance project is aimed at increasing access to housing finance through primary as well as secondary mortgage market in Nigeria.
“Right now, we only have primary mortgage institutions. so we are going to establish a mortgage refinance company that will benefit from this.
“Hence $250 million will be devoted to the establishment of the mortgage refinance company.
“The remaining money will also be used for three other companies for the Nigeria hosing finance project.
“The establishment of mortgage guarantees product targeted at the lower income borrower will gulp $25 million.
“This guarantee will enable people who otherwise cannot provide adequate collateral to access loans.
“There will also be $25 million, which that will be lent to housing micro finance banks so that they too provide housing finance.
“We know that one of the major issues that is constraining the development of our mortgage industry is lack of technical competence as well as capacity building.
“So $10 million will be devoted to capacity building and also as technical assistance.
“This would give them the capability to drive the mass housing scheme.”
Another memo considered and approved by Council was presented by the Minister of Interior, Comrade Abba Moro, seeking to grant Nigerian citizenship to 174 foreigners.
After deliberation, 45 foreigners were granted citizenship in the registration category while 129 were in the naturalization category.
However, Council denied 27 of the applicants over issues bothering on security and tax payments.