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Nigeria: 'Why Mortgage Banks Are Not Growing'
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Daily Trust (Abuja)
13 July 2008
Posted to the web 14 July 2008
Chris Agabi
Lagos
Negative perceptions, dearth of long term funds and unfriendly laws have been identified as critical factors militating against the growth of mortgage banking business in Nigeria. The Managing Director of Resort Savings and Loans Plc, Mr. Abimbola Olayinka gave the indication while speaking to newsmen in Lagos.
"There is the perception in the market that mortgage banks are not that strong. Secondly, there is the dearth of long term funds to build mortgages and laws like the Land Use Act are major challenges to the mortgage industry," he said.
He, however, noted that the business climate is improving and by the time mortgage banks began to post impressive profits, the negative perception would change.
While advocating for more long term funds to drive the industry, Mr. Olayinka commended the efforts of the CBN, the regulatory authorities and the National Assembly in trying to review the existing laws that have become impediments to the growth of the industry, particularly the Land Use Act.
He indicated that Resort Savings and Loans Plc was targeting housing for the low and medium income earners, not just the rich class. According to him, he was partnering with the Taraba state government to package mortgages for low income civil servants in the state while talking with Benue and Nasarawa states as well.
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Currently, he said, he was developing estates in Karu at the outskirts of Abuja, and Mowe in Lagos, for low and medium income earners. On his company's plans in the next three years, he said he is targeting N25 billion capital base to position the company, among key players in the industry.
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