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13 States Set to Adopt New Mortgage Law

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housing-loans
  • 13 States Set to Adopt New Mortgage Law

To make access to land, housing and mortgage less cumbersome for their indigenes, about 13 states are expected to adopt the Model Mortgage and Foreclosure Law between now and the first quarter of 2019.

The MMFL is an initiative of the Nigerian Mortgage Refinance Company which calls for the creation of a state mortgage board as a single window clearance mechanism to facilitate accessible and affordable mortgages for residents of the state.

The PUNCH gathered on Friday that eight states – Edo (which has established a mortgage board) Akwa Ibom, Cross River, Kogi, Benue, Plateau; Kebbi; and Gombe – will conclude the process by November.

Ogun State, on the other hand, is awaiting the governor’s sign-off to adopt the law while four other states are said to be looking at adopting the law by the first quarter of 2019.

Lagos and Kaduna states have enacted their own mortgage model law, and have worked on their property rights and land digitisation.

In most developed countries, mortgage plays an important role in homeownership. But in Nigeria, the process as well as the interest rate impede the growth of the mortgage industry, which is said to currently contribute only about 0.5 per cent to the country’s Gross Domestic Product. In some countries such as South Africa, mortgage contributes close to 30 per cent to the GDP.

When adopted, the MMFL is expected to create an enabling environment for states to provide affordable housing for their citizens by de-risking the housing and mortgage sector and unlocking its potential for economic growth.

According to the provisions of the law, the ease of doing business index for the states affected will be improved and this will in turn further improve the business case for new investments in housing and catalyse access to finance for citizens of the states.

This, it was gathered would lead to increasing taxable income to the states as well as improvements in the internally generated revenue profile.

The law will also make provision for the establishment of mortgage board and mortgage registry; reduce the time stretch it takes to issue Certificates of Occupancy by delegating top government officials to sign the governor’s consent rather than the governor alone; and make land ownership transfer easy, among other benefits.

The Central Bank of Nigeria’s Head, Project Administration Team of the National Housing Finance Programme, Mr Adedeji Adesemoye, stated that the law would help to correct some of the shortcomings of the Land Use Act, which limit access to land and housing.

“It will create better access to mortgage loan in the states and help manage the current Land Use Act which has some unintended negative aspects that limit access to land and which in turn is a restriction of access to homeownership,” he said.

He said Lagos and Kaduna states that adopted the law earlier had streamlined their operations so that people applying for C of O could predict when it would be issued.

“If you apply for governor’s consent to mortgage your property, you can predict when it will be issued. Some of these states have also delegated the governor’s consent so that any of the commissioners so delegated can sign it, which will make the process faster,” Adesemoye said.

He also said the processes would help the states to key properly into the Federal Government’s reforms and make mortgage transactions to take place in their states regularly, thereby helping to entrench mortgage in the housing sector.

According to findings by our correspondent, since adopting the law, the Kaduna State Government has modified and automated its land registry; fast-tracked the mortgage registration process; and initiated a process where the governor’s consent must be granted within 30 days of application.

It has also helped the state to attract a World Bank investment of over $200m and increased its IGR.

Similarly, the Lagos State Government has automated its land registry.

Adesemoye said the law would serve as a paradigm shift from supply-driven housing development to demand-driven where developers would not be building without having a demand.

“Currently, developers are building but not looking at effective demand; so, we have buildings on the ground that are not in demand; there is a disconnect between demand and supply. And then the banks will be suffering because of the loan taken for the development. But the new structure will enable homeowners to decide what they want according to their income and go for it,” he added.

The Chief Executive Officer of real estate development firm, Alphacrux Limited, Tobi Adama, stated that with the population of the country at almost 190 million, Nigeria should have much more than the estimated registered 50,000 mortgages.

He said, “This shows we have not scratched the surface at all. If the states are adopting a new mortgage law, it should be encouraged because we need more people to take mortgages. People still save for 10 to 20 years before buying a home, but it should not be so.

“Once you have a steady income, you should be able to take mortgage and pay it over the next 30 to 40 years, depending on your age. That is what is done in every advanced country. Within Africa, mortgage still contributes a lot to the GDP; but it is not so in Nigeria.”

A former Chairman, Estate Surveyors and Valuers Registration Board of Nigeria, Williams Odudu, said it was heart-warming that state governments had started thinking of ways to make homeownership easy for their indigenes.

He however stated that civil servants should be given a reorientation.

According to him, they create unnecessary bottlenecks that hinder the implementation of certain laws by government.

“Some challenges are put in place by civil servants who exploit the situation. They intentionally create problems that will make the system not to work. A Certificate of Occupancy, for instance, should not take more than one month but some civil servants, not necessarily the governor, increase the time. Their mindsets about making money through exploitation should be changed for the new system to be effective,” he said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

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Godwin Emefile

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

The Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has pledged to adopt accommodative monetary policy stance in 2021 in order to support economic growth in the country.

Emefiele, said this on Friday, while speaking at a CBN/Bankers’ Committee’s initiative for economic growth, which is a one-day special summit on the economy by bank chief executive officers.

The theme of the summit is: “How to Overcome the Pitfalls of Recession.”

Nigeria’s economy recently came out of recession, according to the Gross Domestic Product report for fourth quarter 2020 released by the National Bureau of Statistics.

Owing to the slump GDP growth of 0.11 per cent that lifted the economy out of recession, Emefiele said it was imperative that, “we do all we can in 2021 and beyond to ensure that we build on the positive momentum and strengthen our efforts at stimulating growth.”

He expressed optimism that with the discovery and deployment of vaccines worldwide, 2021 would be a year of massive global recovery and Nigeria must not be left out.

“The banks CEOs are here, whether by moral suasion or by force, they will have to participate in this journey. In order to drive and sustain this recovery therefore, we need to sustain the accommodative fiscal and monetary policy measures aimed at improving access to finance for households and businesses.

“Secondly, we must prevent a resurgence in Covid-19 related cases. Thirdly, we must ensure that a significant number of our population is significantly vaccinated and also improve foreign exchange inflows into our country,” he added.

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Banking Sector

CIT Microfinance Bank Disburses Over N16bn Loans

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CIT Microfinance Bank Disburses Over N16bn Loans

CIT Microfinance Bank Limited says it has disbursed about N16bn loans since it commenced operations as part of its contributions to the financial sector and empowerment of businesses.

The Managing Director of the microfinance bank, Mr Kingsley Eremionkhale, disclosed this during the company’s 10th anniversary in Lagos recently.

He reiterated that the bank was committed to supporting the growth of small and medium-scale enterprises in the country.

“Since inception, we have disbursed loans worth about N16bn. Our operation is not just about profit-making, but we have impacted many lives, empowered many businesses, and done a lot in terms of our core mandate as a microfinance bank.”

While appreciating its customers who had been loyal to it for years, he said it was concerned about their business success.

The managing director said, “We are part of our customers’ businesses. We provide services beyond lending and savings products and we also give financial advisory services.”

He appreciated the customers who had stayed with the financial institution for many years.

The managing director noted that the MfB is a state-licensed bank operating in Lagos, and a subsidiary of Capitalfield Investment Group.

He also attributed the success of the MfB to the board of directors which it said had been supportive, the management team and its workforce in the past 10 years.

While saying that the bank could lay claims to exponential growth, he said the public should expect more from it.

He also said that it was driving its operations through its digital offerings and our e-channels, to improve its services to our customers.

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Finance

FMDQ Approves Valency Agro’s N5.12bn Commercial Paper

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FMDQ

FMDQ Approves Valency Agro’s N5.12bn Commercial Paper

FMDQ Securities Exchange Limited has announced the approval of the quotation of the Valency Agro Nigeria Limited N5.12bn Series 1 Commercial Paper under its N20bn CP Programme on its platform.

The Exchange said in fostering the development of the Nigerian debt capital markets, it had continued to avail its credible and efficient platform as well as tailor its listings and quotations services to suit the needs of issuers and registration members through innovative and uninterrupted service delivery.

It said in a statement on Thursday that the Valency Agro Nigeria CP debut issue came at a time when the Nigerian economy was bedeviled with soaring food prices, amidst compounding challenges of insecurity.

It said the agricultural sector and its attendant transformation agenda had never been more important in driving increased and sustainable production of agricultural products as well as the derived foreign earnings through exports.

The Exchange said the proceeds from the issue of the CP would be applied by Valency Agro towards meeting the mid-term working capital requirements of the various agricultural produce under its portfolio such as cashew, sesame, cocoa and in value addition prior to export.

The Executive Director, Valency Agro Nigeria Limited, Mr Sumit Jain, was quoted as saying, “We are thankful to our investors towards showing their faith in our agenda to grow the agriculture-focused business with a clear aim to maximise value addition and create employment opportunities in Nigeria.

“We would also like to commend the efforts made by FBNQuest Merchant Bank Limited’s team to build the reach and FMDQ for their unconditional support for the industry”.

The Head, Capital Markets, FBNQuest Merchant Bank, Mr Oluseun Olatidoye, said, “FBNQuest Merchant Bank Limited is delighted with the successful debut of the N5.12bn Series 1 CP issued by Valency Agro Nigeria Limited. This reiterates our effort to enable underserved sectors access the debt markets, optimise their capital structure and further deepen the domestic capital markets.

“We are proud of the instrumental role FBNQuest Merchant Bank played in this transaction and appreciate the trust the management of Valency Agro placed in us to assist them. Our clients remain our priority, and we strongly believe their success is our success.”

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