In a bid to deepen mortgage penetration and promote home ownership among citizens, the Mortgage Bankers’ Association of Nigeria (MBAN) is mounting pressure on state governors to adopt its Model Mortgage and Foreclosure Law in their localities. The MBAN President, Mr. Adeniyi Akinlusi, said the establishment of the law has become necessary in order to entrench mortgage finance in the country. He said the association had been engaging state governments and exploiting the Governors’ Forum on the establishment of mortgage and Foreclosure Law in order to make use of home ownership as a bridge for financial inclusion and insurance penetration to boost states’ Internally Generated Revenue (IGR). He lauded Kaduna State government for being the first to pass MBAN’s Model Mortgage and Foreclosure Law, adding that this step has propelled the state to access $250 million facilities from the World Bank in support of its efforts in trying to loosen the economy.
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This step, he said, would make Kaduna State’s economy liquid, guarantee attraction of capital and ensure that citizens, especially residents of Kaduna, have access to loans to buy houses. On benefits inherent in establishing a Foreclosure Law by states, Akinlusi said: “What it does is that in terms of timing and in terms of cost, it is faster for people to perfect their title. It is also cheaper in terms of cost. “These are things that affect mortgage rates and risk premium; it also affects the meeting time for the conclusion of transactions.” Besides, Akinlusi said that passage of Mortgage and Foreclosure bill into law by state governments would have positive effects on ease of doing business. He said: “What Kaduna State government has done is call the Model Mortgage and Foreclosure Law. It is being recommended for all the state governments as well. They should take a cue from it. “On the back of this giant steps being taken by Kaduna State government, we are engaging with other states, we are even engaging the Governors’ Forum to see how we can use home ownership as a bridge for financial inclusion, for insurance penetration, for increasing even the IGR because we know that in most of these states, what they have in common is huge informal sector.”
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The MBAN boss explained that the informal sector contained 65 percent of Nigeria’s Gross Domestic Product (GDP), adding that major concern was how to move these people into mortgage finance. Akinlusi said: “We are looking at how we can move them in because for each house you finance, you create at least 70 jobs, 35 directly and 35 indirectly. “This is also a big way towards reducing the unemployment rate, which stands at 20 to 40 percent.” Housing experts have identified complications in enforcing mortgage contracts and foreclosure on properties in Nigerian courts as one of the serious impediments to adequate housing delivery in Nigeria.
Other major drawbacks include limited access to housing and mortgage financing, slow bureaucratic procedures in land administration and high cost of land registration, difficulties in delivering affordable housing to low and middle income households wherein lies the greatest demand for housing, high rate of population growth, high rate of rural-urban migration and exorbitant cost of construction materials.
Source: New Telegraph
