Advanced credit by 35 Primary Mortgage Banks (PMBs) in the country to the housing sector is about N229 billion, the Director, Financial System Strategy (FSS) 2020 with the Central Bank of Nigeria, Mr. Mohammed Suleyman, has hinted.
Suleyman disclosed this in Abuja during a webinar on: “Housing Finance Ecosystem: Matching the Demand and Supply and the Intervention,” hosted by the Housing Development Advocacy Network (HDAN).
This credit advances by mortgage banks to housing sector, according to him, fell short of the estimated N60 trillion needed to close accommodation gap of 17million units in Nigeria in the next 10 years.
“If we need about N60 trillion in order to close the housing gap in Nigeria in the next 6 to 7 or 10 year, this is a far cry from the reality of where we should be. This in perspective, put us in a very challenging situation that we need to do something, moving away from the conventional mortgage models that we have worldwide in Europe and America” he said.
Speaking on efforts towards developing a working financial system, especially for the housing finance sector in Nigeria, Suleyman said the initiative had moved away from having to rely on the deposit money banks to fund housing by introducing the Primary Mortgage Banks.
As as today, he stated that 35 primary mortgage banks licensed in Nigeria have an asset base of about N451billion.
He described the proposed fund intervention by CBN to housing sector as ‘apt’, suggesting that it must be structured in such a way that it will meet the objective of what it is meant for.
“I think the CBN intervention is quite laudable and I commend the central bank governor for bringing it in because it is an area that we have always identified as a very worrisome area particularly when you look at housing finance in Nigeria,” he said.
He recalled that there had been interventions in different sectors of the economy that never yielded any desirable results, warning that the proposed CBN’s intervention must be well- structured to meet its target.
“I think this time around we have to structure it in such a way that it will be able to meet the objective of what it is meant for,” he said.
On whether the proposed fund intervention for the housing should be directed at the demand or supply side of the housing value-chain, the director in charge of FSS-2020 said it should directed to both sections.
He said it was high time the entrepreneurs involved in the manufacturing of building materials be encouraged to reduce cost.
He said : “In the supply side, I think we need to start to encourage entrepreneurs or entities that are involved in the manufacturing of cheap building materials.
“That will translate into making house construction more affordable than it is today.”
Suleyman also urged support for the financial institutions.
According to him, “on the demand side I think it is important to support the financial institutions that will be engaged in funding some of these interventions. If you don’t have the money how do you extend your credit?”
Another affordable housing advocate, Dr. Francis Onwuemele, urged government to develop a strong and robust developmental framework to address the issue of demand and supply.
On CBN intervention, he said it should be given to tested developers to build on time, as per standards, and allocate to Nigerians that really deserve it through a system that makes sure investors don’t buy up the houses and resale to ordinary Nigerians.
Source: newtelegraphng.
