The commencement of operations by Nigeria mortgage refinance company (NMRC). The disbursement of mortgage refinance proceeds to mortgage lenders have increased liquidity in the sector, experts have said.
NMRC, a fledgling secondary mortgage company in Nigeria, is an initiative of the mortgage banking association of Nigeria (MBAN), federal ministry of finance, the central bank of Nigeria (CBN) and World Bank to drive home ownership. Managing Director, TrustBond, and mortgage bank plc Mr Adeniyi said the principal objective was to addresse the long term funding constraints hindering the growth of the primary mortgage market while reducing the funding cost of the residential mortgages and enhancing assess to housing by Nigerians, especially the low to the middle income classes.
At the 7th Annual general meeting of the company in Lagos on Monday, Akinlusi said his bank recorded a total asset of N9.7 billion naira at the year end of 2015, representing a 7percent increase over the previous year’s figure. He said the bank is poised towards effective mortgaging with over N20billion to drive home ownership across the country.
On the achievements of the company especially from their transition form, a real estate development company to a mortgage firm according to the new cbn regulations prohibiting mortgage banks from real estate developments he said though it affected their earnings initially, they however, quickly came out of it.
He explained that customers deposit in 2015 amounted to N2.1billion, reperesenting 11.3percent growth over the 2014 financial year despite the regulatory and economic challenges in the sector.
The Challenges of the mortgage sector, Akinlusi said, include. But not limited to lack of long term funds and effective for closure law. He called on the government to initiate robust policy to drive the sector, nothing that is in a recessed economy with job losses and contracting economy subscribers will not be faithful with their monthly mortgage payments.
The TrustBond managing director called for effective for closure that will enable prosecution of defaulters. He asked state government to encourage the process by encouraging their own for closure law to bring sanity to the sector. This, according to him, will encourage more people in the sector and create more houses for the public.
Earlier, the chairman of the company Mr.Etigwe Uwa, said 2015 was very challenging from crude oil price of $112 to barrel in June 2014, to$35 per barrel in 2015, far below the nation’s budget bench mark. He explained that the cbn through the monetary policy committee (MPC) reduced the monetary policy rate (MPR) from 13percent to 11 percent the lowest price since 2009 as well as cash revers ratio (CRR) from 25percent to 20percentto stimulate the economy unfortunately didn’t add-up as the effects are still around us today.
He commended the NMRC for the issuance of N140billion medium term note programme that improved the tenor of mortgages to a maximum of 20years as against 10year and sometimes less loan tenor that was prevalent in the sub-sector.
He said the program has enhanced mortgage affordability has according to him longer loan foster lower monthly payment. He said this singular window afforded the company the opportunity to strategically double its capacity to refinance mortgages with NMRC.
On the future of the bank Uwa pointed out the access to long term funding germane for a successful under mortgage operations. He said “to this end we are sowing the strategic seeds for the growth of our core operations which is banking and mortgages activities by securing access to long term funding, from NMRC through our bold decision to double our equity stake in NMRC as an equity investment”.
He pledged the company’s preparedness to continuously compliment the required funding from NMRC with National Housing Funds from the Federal Mortgage bank of Nigeria and other sources.
The TrustBond chairman further stated that the banks have developed liquidity management framework based on a statistical model underpinned by conservative assumptions with regards to cash inflows and the liquidity of liabilities.
He said “the mortgage bank liquidity has consistently been above the minimum liquidity ratio and the requirement of the it’s stress tests. Our shareholders are in good hands a s result of high cooperate governance”.
BY okwy Iroegbu-Chikezie