The proposed Mortgage Refinance Company (MRC) of the Federal Government got a boost Wednesday as the Federal Executive Council (FEC) approved a $300 million facility to be accessed from the International Development Association (IDA), a member of the World Bank to launch the institution. The approval came on the heels of a memo brought before FEC by the Minister of Finance and Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala.
While briefing State House correspondents shortly after the weekly FEC meeting, the Minister of State for Finance, Alhaji Yerima Ngama, disclosed the objective of the MRC was 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 had expanded rapidly as a result of urbanisation, adding that there was an estimated demand of 700,000 housing units annually. This, according to him, was above the current level about 100,000 units in the country.
"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 Nigerian housing finance project is aimed at increasing access to housing finance through primary as well as secondary mortgage market in Nigeria. Continuing, he said: "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 housing finance project. The establishment of mortgage guarantee 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."
According to the minister, "there will also be $25 million which that will be lent to housing microfinance banks so that they too provide housing finance. We know that one of the major issues 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."
Also speaking at the briefing, the Minister of Interior, Mr. Abba Moro, disclosed that the council approved a memo from him, which sought to grant Nigerian citizenship to 174 foreigners.
He said 45 persons were in the registration category, while 129 persons were in the naturalisation category. The council also denied 27 of the applicants over issues with security and tax payments.