19 September 2017

Nigeria: Sterling Bank Takes Giant Strides in Housing Sector

Nigeria has a worrisome deficit in housing, which as at 2012, was estimated at a minimum of 17 million units. Recently, the figure was raised and, according to experts, it could be up to 20 million units, if a proper investigation of the state of affairs in the sector was undertaken. Interestingly Sterling Bank Plc., has been playing significant financing role on both the demand and supply side of the housing sector, designed to contribute to a reduction of the deficit. Bennett Oghifo writes

Majority of Nigerians live in blighted and unplanned areas that are unfit, and some are unfit for human habitation, and most of these communities are in cities. Some housing experts argue that the deficit in the 2012 report of the World Bank was as a result of these unplanned communities like Lekki, which, though have beautiful homes, but was not documented as livable because of the unplanned environment.

Recently, stakeholders met in Abuja at a housing show where awards were presented to firms and individuals that contribute to the development of the nation's housing sector. Sterling Bank Plc., was one of the institutions that stood out with an award, distinguishing it as the Housing Friendly Commercial Bank of the Year.

Minister of Power, Works and Housing, Mr. Babatunde Fashola, who was at the event with other senior government officials, remarked that Nigeria has been contending with a huge deficit in the housing sector over the years. He decried the current situation which effectively enables only one per cent of the Nigerian population access mortgage facilities, saying it is extremely low relative to a country like the United Kingdom with 77 per cent.

Fashola expressed concern that the deficit was apparent both on the supply and demand sides, stating that it was not just that the housing situation was grossly inadequate to satisfy the needs of the population, access to a mortgage was also inadequate.

The minister noted that financial institutions have allocated barely one percent of their loan portfolios to housing and about 11 percent to construction in the last 30 years.

However, stakeholders saw the award as due recognition to Sterling Bank Plc., a financial institution that has played a significant role in the housing sector by adopting an innovative model that takes adequate care of the demand and supply sides.

All things considered, Sterling Bank won the award as a result of its remarkable impact on housing delivery in the country. Specifically, the Commercial and Institutional Banking Group within Sterling Bank has established a firm footing in the housing sector by wholly and partly financing some landmark real estates in the country.

Some of the housing estates include; the part-financing of Crown Court Mabushi in Abuja for Crown Realities Plc. The project comprises 72 units of 3-bedroom flats, 18 units of 4-bedroom semi-detached houses and 16 units of detached 4-bedroom houses.

Prior to this, Sterling Bank had part-financed the prestigious Crown Estate in Lekki, located on a 41.7 hectares gated private estate along the Lagos-Epe Expressway in 2000.

Other residential projects part-financed by Sterling Bank in collaboration with developers include, Diamond Estate, Amuwo Odofin, Lagos; 360 low-cost housing units for Diya Fatimilehin & Co., Friends' Colony Estate, Lekki Lagos; a 210 semi-detached and detached housing units for Aircom Nigeria Limited, Common Wealth Court, Lekki; 36 apartments of Defacto Properties Limited and Bourdillon Court Estate, Lekki, Lagos comprising 192 housing units (flats and Terrace houses) for Aircom Nigeria Limited.

Others are Cromwell Court's 180 units of apartments; Milverton Estate's 240 units of apartments, Northern Foreshore Estate's 566 mixed housing units; Napier Garden's 220 mixed housing units, all for Aircom Nigeria Limited in Lekki, Lagos and Tarino Towers' 29 units of apartments for FMT Parkview Limited located in Ikoyi, Lagos.

Sterling Bank also part-financed Visage Apartment's Victoria Island Lagos, 40 units of apartments for Sat Leasing Limited on Victoria Island, Lagos; Primewaterview Gardens', phases I & II 539 units of apartments for Primewaterview Ltd in Lekki Lagos; Eko Court, Parkview Estate's,12 units of apartments for Samtl Properties Ltd in Ikoyi, Lagos; Happy Haven's Banana Island's 16 units of apartments for Samtl Properties Ltd in Ikoyi, Lagos; Doby Haven's 20 units of apartments for Eco Building Ltd in Lekki, Lagos and Pearly Gate Estate's 40 mixed housing units for Edward Properties Konsult.

The bank has also wholly financed another residential estate for Crown Court in Durumi, Abuja which was inaugurated recently by the Minister of the FCT, Mr. Mohammed Bello.

Managing Director and Chief Executive, Crown Realities Plc, Mr. Darl Uzu, commended Sterling Bank for stepping in to provide critical financing for development projects in the country, particularly in a period of recession. Uzu said the financial institution has proven to be a dependable partner in times of need for Crown Realities Plc.

"At the height of the recession when funds are scarce and investors' confidence was at its lowest, Sterling Bank stood by us and extended credit to finance our operations," he said, adding that Crown Realities will not disappoint the bank and will do everything possible to further strengthen the confidence reposed in the company. "We'll always do our part every time."

Executive Director, Commercial and Institutional Banking of Sterling Bank, Mr. Lanre Adesanya described the bank's partnership with Crown Realities as a huge success. He said the real estate development company was tested and found to be well-managed, prudent and cost efficient.

Adesanya noted that Sterling Bank has also made significant commitments in the real estate segment especially in Lagos. According to him, the bank has done quite well in retail real estate financing and is ready to provide credit to real estate developers who emulate Crown Realities' prudent project selection and management model.

"We are happy to be part of the success of Crown Court Durumi, another landmark project which further strengthens our partnership with Crown Realities Plc. It means that Sterling Bank will always do more with a trusted party who never disappoints, and that's what Crown Realities has proven to be - a trusted party," Adesanya said.

He said the partnership is a success story for Sterling Bank, adding that the bank is willing to do more for whosoever is willing to do what Crown Realities has done.

Group Head, Non-Interest Banking Group of Sterling Bank, Mr. Basheer Oshodi noted that apart from Housing Friendly Award, Sterling Bank also won a similar award tagged "The European-Islamic Bank of the year Africa in 2016" in London which was organised by a UK based magazine, The European. He said the awards were won in recognition of the giant strides also being taken by the Non-Interest Banking Group in Nigeria's housing sector.

Oshodi said the model of engagement created by the NIB group enhanced the ability of many Nigerians to own houses under a flexible mode of payment, adding that the NIB group has done so much in making affordable housing available to Nigerians.

According to him, customers who express interest in the home ownership model are made to contribute between 20 and 30 per cent equity over the construction period of 18 months after which the facility is booked for future ownership. He added that rentals in the scheme are less than what would have been paid in a conventional banking arrangement.

"We have developed an innovative method of home ownership for Sterling Bank customers. The model gives an opportunity to the buyer to own a house without the stress of bulk payment. Where the house is already built, a prospective home owner simply makes equity contribution and is booked for future ownership. Even if there is no house on the ground and the customer signifies an intention to access a mortgage, the next step will be to start contributing equity," Oshodi said.

There is no doubt that Sterling Bank is making significant contribution to the growth and development of Nigeria's beleaguered housing sector. Although it may represent a drop in the ocean, but the giant strides of Sterling Bank in the housing sector would certainly play a role in ameliorating the situation. It is hoped that other corporate bodies would emulate Sterling Bank's laudable effort and help to reduce the housing deficit so that every Nigerian will have access to decent homes.

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