How 14 pilot states can benefit from mortgage refinance scheme
When the Nigerian Mortgage Refinance Company (NMRC) was launched early this year by the federal government, 14 out of the 36 states of the federation indicated interest in the scheme. They are to serve as the pilot states and by extension a veritable test case for the much-talked about Public Private Partnership arrangement between the Federal Government of Nigeria and the private sector set up to bridge the funding cost of residential mortgages and promote the availability and affordability of good housing to working Nigerians by providing mortgage lending banks with increased access to liquidity and long terms funds in the mortgage market.
The 14 pilot states that have shown interest in the mortgage scheme of which the remaining 22 states are awaiting the outcome of the romance before following suit are: Abia, Anambra, Bauchi, Bayelsa, Delta, Edo, Enugu, Ekiti, Gombe, Kaduna, Kano, Kwara, Ogun, Ondo and FCT.
The federal government, while trying to convince state governments to key into the programme, said if the states can create an enabling environment for the mortgage finance, they will be able to attract NMRC to refinance mortgage loans created in these states by increasing employment/labour and housing production and stimulate housing construction and manufacturing of building materials in such states.
The federal government stated that such states will experience a significant increase in Internally Generated Revenues (IGRs) through withholding tax earned from increased transactional activities, personal income tax earned from increased residency in such states, and free income earned from increased volumes of mortgage transactions at the lands registries due to efficiencies created by digitization and reduced mortgage transaction costs.
The federal government reels out more benefits therein thus: “The opportunity presented by the housing market can be exploited if all government agencies -- state and federal and private sector financial institutions and construction companies, etc act responsibly. What this means is that all households wishing to either develop their existing homes or acquire a home of their own must know that they have easy and fair access to a Certificate of Occupancy without any doubt. This must be as natural as the right to a passport. Land registries in the states must provide access to these rights at a low cost and within a few months rather than within a few years as is often the case.”
The tone of the federal government offer to states through NMRC sounds enthralling and with the recent take-off of the programme, time will tell how effective this programme will be. Question on the lips of many observers of the scheme is whether it will not end up in the usual good policy but poor implementation.