- Ensure expansion to informal sector - Expert
Despite the crucial role the mortgage industry plays in Nigeria's economy, the mortgage sector has long been plagued by inefficiencies, a lack of transparency and complex bureaucratic hurdles that make homeownership an uphill battle for millions of citizens.
With a housing deficit exceeding 20 million units, the sector's underperformance is starkly evident. Mortgage penetration remains below 1% of GDP, significantly lower than rates in other African countries like South Africa (30%) and Kenya (5%).
This disparity highlights systemic issues that have stifled growth and deterred investment in Nigeria's mortgage sector.
The absence of a centralised, verifiable mortgage record system has exacerbated these challenges, leading to fraudulent property transactions, multiple claims on properties and protracted delays in mortgage approvals.
For decades, prospective homeowners have faced long approval timelines, difficulty in verifying property ownership and inconsistent lending practices from financial institutions. This fragmented system has not only hindered growth in Nigeria's real estate and mortgage banking industries but has also made affordable housing finance inaccessible to the majority of the population.
Experts in different fora have consistently advocated a coordinated mortgage data to be able to determine Nigerians who are desirous of mortgage.
Daily Trust reports that the Federal Mortgage Bank of Nigeria is the apex mortgage bank in the country. It was founded in 1956. At the time of its establishment, it was known as the Nigeria Building Society (NBS). It was formed as a joint venture of the Federal Governments and Eastern Governments of Nigeria, and the Commonwealth Development Corporation. It was renamed Federal Mortgage Bank of Nigeria (FMBN) in 1973 after the federal government was given full control of the National Building Society through the Indigenisation Act.
The FMBN acquired the status of the apex mortgage institution in Nigeria with the proclamation of the Mortgage Institutions Act 53 of 1989 and the FMBN Act 82 of 1993. In addition, the Federal Mortgage Bank of Nigeria became the sole manager of the National Housing Fund which is a form of savings that organises and manages long-term funds from the federal government, banks, insurance companies, and Nigerian workers to promote the giving of loans at lower interests to contributors.
About National Mortgage Registry
The National Mortgage Registry (NMR) represents a paradigm shift in Nigeria's mortgage sector. Designed as a centralised, digital database, the NMR will record all mortgage transactions in real-time, providing a single source of truth for stakeholders. This innovative digital repository will enable financial institutions, government agencies and home buyers to verify property titles, track mortgage statuses and prevent fraudulent transactions with unprecedented ease.
The NMR's primary goal is to streamline mortgage processing, reduce risks for lenders and expand homeownership opportunities for Nigerians across all income levels. This is particularly significant for those in the informal sector, who have historically been excluded from formal mortgage financing due to a lack of verifiable income documentation. By leveraging technology, FMBN is entrenching a culture of inclusivity in mortgage financing, ensuring that no Nigerian is left behind in the quest for homeownership.
The National Mortgage Registry is not just a technological upgrade; it is a foundational tool for economic empowerment.
By digitising mortgage records, Nigeria is joining the ranks of advanced economies where digital registries have proven to be catalysts for housing market growth. For instance, countries like the United Kingdom and Singapore have long benefited from centralised property registries, which have enhanced transparency, reduced fraud and attracted foreign investment. The NMR aims to replicate these successes in Nigeria, setting a new standard for mortgage banking in Africa.
Why Nigeria requires a mortgage registry - FMBN
The Managing Director/Chief Executive of Federal Mortgage Bank of Nigeria, Shehu Usman Osidi, while commenting on the spearheading of the establishment of the National Mortgage Registry (NMR) championed by the bank noted that the process is currently in the digital application development and testing phase, as the NMR is poised to revolutionise the mortgage banking landscape, bringing the much-needed transparency, efficiency and accessibility to Nigeria's housing finance system.
He said, "A digital, centralised mortgage registry will ensure that all property transactions are properly recorded and easily accessible, significantly reducing fraud and disputes. The NMR will eliminate the rampant issue of multiple claims on a single property, a problem that has led to countless legal battles and eroded trust in the mortgage system. With verifiable mortgage records, financial institutions, developers, and homebuyers can engage in transactions with confidence, knowing that the data is accurate and up-to-date.
"This transparency is expected to have a ripple effect on the broader economy. For example, it will reduce the risk of non-performing loans (NPLs), which have been a major concern for Nigerian banks, including FMBN. By providing lenders with reliable data, the NMR will enable them to make informed decisions, thereby improving the overall health of the financial sector," he explained.
In terms of efficiency in mortgage processing, he said, "The current mortgage system in Nigeria is notoriously slow and bureaucratic, with approval timelines often stretching into months or even years. The NMR will address this by automating verification processes and reducing reliance on paperwork. Banks and mortgage institutions will have access to real-time data, enabling them to make quicker lending decisions."
Subsequently, it has been observed that one of the biggest challenges facing mortgage lenders in Nigeria is the high default rate, exacerbated by a lack of reliable borrower data. However, the FMBN boss stated that, "The NMR will provide lenders with comprehensive mortgage data, enabling them to assess borrower risk more accurately. This will lead to lower default rates and encourage banks and private mortgage firms to expand their lending portfolios.
Moreover, the NMR will improve credit scoring systems, making it easier for Nigerians with limited credit histories to qualify for mortgages. This is particularly important for young professionals and entrepreneurs who are often excluded from traditional lending systems.
"This will also aid Effective policymaking which relies on accurate, up-to-date data. The NMR will provide policymakers with real-time insights into housing finance trends, enabling them to identify gaps in homeownership and mortgage accessibility. For instance, data from the NMR could reveal disparities in mortgage access between urban and rural areas, prompting targeted interventions to bridge the gap."
The bank explained that as of March 2025, the FMBN had developed the NMR digital APP, which is in its final testing phase, with deployment expected later this year. Following the test running, FMBN will be finalising system security protocols and integrating with existing banking and land registry platforms. On this, the bank is collaborating with the Central Securities Clearing Services (CSCS) to ensure seamless interoperability.
FMBN is further mulling plans to conduct training programmes for financial institutions and real estate developers to ensure smooth adoption of the NMR, while also planning the launch of a nationwide public awareness campaign to educate Nigerians on how to access and use the registry.
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Expand access to informal sector - Expert
Speaking on the issue, the immediate past president of the Real Estate Developers Association of Nigeria, Aliyu Wammako, stated that there is a need for the register to capture the teeming population of Nigeria's informal sector hoping to get decent housing through mortgage.
"Nigeria's informal sector constitutes over 60% of the workforce, yet its members are often excluded from formal mortgage financing due to difficulties in proving income stability. The NMR, alongside FMBN's innovative mortgage products, should aim to bridge this gap by developing alternative credit scoring methods tailored to informal workers.
"I understand the NMR could incorporate data from mobile money transactions, utility payments and other non-traditional sources to assess creditworthiness. However, specialised mortgage products such as flexible repayment plans and lower down payments, can also be introduced to cater to the unique needs of artisans, traders, and SMEs. These measures will ensure that more Nigerians benefit from the National Housing Fund (NHF) scheme, making homeownership a reality for a broader segment of the population," he said.
He also added that the registry should boost private sector participation and attract investments.
"The NMR should be able to Public-Private Partnerships (PPPs) in affordable housing projects, leveraging the expertise and resources of the private sector to deliver quality housing at scale. Additionally, the registry should facilitate the entry of new mortgage finance providers, increasing competition and fostering innovation in the sector.
"Similarly, The NMR should boost investor confidence by aligning Nigeria's mortgage system with international best practices as it is critical for attracting the capital needed to address the country's massive housing deficit," he added.
