The Central Bank of Nigeria, in conjunction with the Mortgage Banking Association of Nigeria, the Nigeria Mortgage Refinance Company, Federal Mortgage Bank of Nigeria and the Nigeria Deposit Insurance Corporation, on Wednesday launched the uniform mortgage underwriting standards for the informal sector.
The stakeholders said the mortgage law would capture the self-employed and business owners categorised under the Micro, Small and Medium Enterprises, with the potential to contribute more than 58 per cent to the nation’s economy.
Among the issues captured in the uniform underwriting standards are property and borrower eligibility, credit worthiness, loan tenor, repayment structure, property title, required security, insurance and mortgage counselling.
The Head, National Housing Finance Programme, CBN, Mr. Adedeji Adesemoye, said the initiative would give those without structured salaries access to mortgage loans for their housing needs.
The MBAN President, Niyi Akinlusi, said the initiative would be a game-changer for the economy in the area of housing.
The Executive Director, Business Development and Portfolio Management, FMBN, Umar Abdulahi, stated that the informal sector constituted a large market that had not been explored.
“We have a large market in the sector but we need social inclusiveness in the area of housing. The law is that anyone who earns up to N3,000 and above is entitled to a mortgage loan but a lot of people, especially outside the formal sector, are not benefiting,” he added.
Adesemoye said in the next six months, the CBN would be able to evaluate the number of mortgages initiated in the sector.
He noted that stakeholders were also developing underwriting standards for non-interest primary mortgage banks and groups, which would be launched between March and April.
The Director, Special Insured Institutions, NDIC, Joshua Etupidiok, said the corporation had also developed an insurance product for the non-interest PMIs.
“It is a large market that we are looking at with a lot of interest,” he added.