The federal government yesterday endorsed plans to borrow the sum of N48.6 ($300 million) from the world bank via the international development association to establish a mortgage refinance company (MRC) and three others to handle access to housing finance through primary and secondary mortgage markets in the country.
The approval which followed a memo tendered before the Federal Executive Council (FEC) by the minister of finance, Dr Ngozi Okonjo Iweala, is in line with the announcement by President Goodluck Jonathan in March this year that the facility has become necessary to aid the proposed housing finance project.
Briefing journalists after the weekly FEC meeting presided over by the president, minister state for finance, Mr Yerima Ngama, noted that, while $250 million is to be spent on the establishment of the mortgage refinance company, the remaining money will also be used for three other companies for the Nigeria housing finance project.
He said, “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 Nigeria housing finance project is aimed at increasing access to housing finance through primary as well as secondary mortgage markets in Nigeria.
“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.”
Ngama added that there will also be $25million which will be lent to housing microfinance banks so that they too provide housing finance.
“We know that one of the major issues that is constrainig the development of our mortgage industry are lack of technial competent 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”, the minister stated.
FEC also approved the grant of Nigerian citizenship to 45 applicants for Nigerian citizenship by registration, even as it approved the grant of Nigerian citizenship to 129 applicants by naturalisation.
The council also approved that the applications for Nigerian citizenship be denied, in line with the recommendations of the Economic and Financial Crimes Commission (EFCC) to 27 applicants.