FG, NHFP kick-start mortgage literacy campaign

Piqued by the sustained lack of access to mortgage and housing microfinance nationwide, the Nigeria Housing Finance Programme (NHFP) implemented by the Central Bank of Nigeria (CBN) with the support of the World Bank has commenced a literacy campaign to stem the tide.

By these activities, NHFP and the apex bank wants to confront the country’s huge housing deficit that is estimated at 17 million.

Accordingly, the NHFP has engaged Abuja-based, Blake & Harper Nigeria, to develop strategies and deploy materials for consumer education, which it hopes would stimulate awareness and increase mortgage uptake nationwide and open access to housing micro finance to eligible housing Micro Finance Banks.

The NHFP Mass literacy plan has the active support of the World Bank, which identifies abysmal mortgage education as contributory to the bane of the housing sector revamp. The World Bank has set aside funds in support of the literacy campaign.

Recently in Abuja, the Governor of CBN, represented by the Director, Other Financial Institutions Supervision Department (OFISD), Mrs. Tokunbo Martins and Managing Director, Blake & Harper Nigeria, Mr. Daniel Kure put pen to paper to kick-start the mass literacy campaign.

Various communication tools are planned to help create the awareness, which involve exploiting a mix of the traditional and new media. There would be advertisement, public relations, electronic media campaign and heightened awareness through the social media platforms.

Through direct marketing, mortgage originating institutions and consumers would be engaged and enlightened. Several brochures, pamphlets, leaflets and assorted literature would be produced and distributed across the country among mortgage lenders, who apply the uniform underwriting standard, consumers and stakeholders. There would as well be direct interaction with the relevant publics through workshops, town and market storms.

In spite of Nigeria being Africa’s largest economy with a gross domestic product (GDP) of $510 billion, the housing and construction sector accounts for only 3.1 per cent of the rebased GDP, producing about 100,000 units of houses yearly.

The lacklustre performance of the country’s Mortgage and Housing micro financing subsector has been of great concern for the government and the industrial subsector. It is estimated that of the nation’s 10.7 million housing stock, barely five per cent is through formal mortgage. Compared with other nations, 10 per cent of Nigerians own homes in comparison with 72 per cent in the United States of America, 78 per cent in the United Kingdom, 60 per cent in China and 92 per cent in Singapore.

The World Bank support for communication through the technical assistance would impact a four-point plan to increase access to housing finance. This plan would help deepen Nigeria’s primary and secondary mortgage markets.

First is the establishment of the Nigeria Mortgage Refinance Company (NMRC), which is the outcome of a partnership between private financial institutions, development finance institutions, and the federal ministry of finance. The NMRC issues standard corporate bonds into the capital markets and subsequently issue loans (refinance) to mortgage lending institutions.

The second component is establishment of a mortgage guarantee product, which would be targeted at potential borrowers with capacity to meet mortgage repayment obligation but have inadequate equity required by the uniform underwriting standard. The third component focuses on Housing Microfinance (HMF) scheme through eligible Microfinance Banks (MFBs). This component aims at supporting the development and piloting of new and or emerging formal HMF products.

The fourth is Technical Assistance (TA) in capacity building of the sub-sector. It will include provision of operational support to NMRC including assistance for bond issuance, mortgage lender training, mortgage consumer protection and financial literacy, housing market information, and impact evaluation of the mortgage market.