The relationship between infrastructure and finance is symbiotic and crystalizes the fact that – one cannot exist in isolation of the other. This means wherever and whenever the need for infrastructural development arises, funding becomes a critical instrument for actualization of such developmental projects.
The Central Bank of Nigeria (CBN) is the apex regulatory authority of the financial system in Nigeria and as such has it role to play in terms of regulating the finance ecosystem of the country. Earlier this year, the CBN Governor, Godwin Emefiele, announced a N50 billion intervention fund as a stimulus package to support households and Micro, Small and Medium Enterprises in order to help mitigate the effects of the coronavirus pandemic.
CBN also, as part of its intervention, disclosed its intention to create a fund for developers in the real estate sector, who have the capacity to repay as at when due. How then does all of this translate to affordable housing for low income earning Nigerians?
CBN’s Deputy Director, Other Financial Institutions Department, Mr Adedeji Adesemoye, has expressed commitment towards creating an intervention fund for three critical areas of the housing sector.
Adesemoye made this known while speaking as a guest Panellist at a CEOs webinar recently hosted by the Housing Development Advocacy Network, HDAN with the theme “Covid-19 Pandemic and Housing Finance Leadership”.
According to him, the intervention would focus on the provision of construction finance for developers that can provide evidence of profiled off- takers with ability to repay, mortgage finance and also to implement friendly foreclosure laws amongst other things.
“The CBN is committed to create an intervention fund for three critical areas of the housing sector- provision of construction finance for developers that can provide evidence of profiled off- takers with ability to repay, mortgage finance to avail funding for mortgage originator and state land administration agencies to process and issue titles promptly and to implement friendly foreclosure laws and reduce cost of land documentation” he said.
He also hinted that the CBN was working on a mortgage interest drawback programme that will reduce interest rate to single digit for mortgages not exceeding N5million apart from the other interventions.
The CBN Deputy Director also revealed that “towards the end of 2019 we put together a framework for mortgage guarantee. We undertake to receive guarantee for the mortgagors that they have been able to create mortgage for”.
He further stated that there exists opportunities in the housing sector that could be harnessed to create jobs, increase home ownership in the country, while also fostering the development of the housing ecosystem.
“The Central Bank itself is also on the developmental side looked into this industry on a value chain approach. That is the industry will contribute once you activate the development of the industry”
“Considering the whole housing sector in itself, there are a lot of developmental approach in terms of job creation in terms of skill development, in terms of home ownership” he noted.
He however pointed out that if the housing market is made attractive enough, investments will flow in and developers will be encouraged to build, which will impact positively on the sector.
“A number of development index can come to bear and make positive progress once you activate the development of housing and make ownership a big business that allows all other SMEs along that value chain to function and contribute to the market” he added.
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