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Speaking at a forum organised by the Construction and Engineering Group of the Lagos Chamber of Commerce and Industry (LCCI) in Lagos, on Wednesday, the President of the Chamber, Dr Nike Akande said the growing urbanisation rate and demand for affordable housing has made it imperative for stakeholders to seek ways to improve financing for affordable housing.
Akande, who was represented by the Director-General of the Chamber, Muda Yusuf, stated that the present mortgage financing schemes in Nigeria do not reflect the ideals of what operates in many contexts.
According to her, the demand-supply gap for affordable housing cannot be bridged with an interest rate that hovers between 25-30 per cent and a shorter tenor.
She advocated indigenous and innovative solutions in addressing this challenge, adding that meeting the shortfalls in housing requirements requires cheap financing schemes.
“The high interest rate regime in the country has made it practically impossible to finance the housing sector from commercial banks. Even the interest rates charged by many of the mortgage finance institutions are not better. Mortgage financing is therefore a major impediment to the provision of housing in Nigeria”, she added.
To address the identified challenges, the Managing Director of Nigeria Mortgage Refinance Company Plc (NMRC), Prof. Charles Inyangete said the financial institution has identified and integrated value chains in the construction in industry to enhance access to finance.
Represented by his Special Assistant, Ini-Odu Akpan, Inyangete said the context of Nigerian environment needs to put into consideration, adding that the NMRC through its N440 billion bond issuance programme hopes to address the financing gap and deepen value-chain operations.
“The problem in Nigeria is that of lack of affordable housing and not just homes. As operators, we need to understand the housing affordability pyramid and consider how pay structure, job insecurity and other socio-economic issues affect home ownership”, he added.
The Chairman of the LCCI Group, Leye Kupoluyi noted that poverty can be reduced when housing challenges are addressed, adding that there is a need for sustainable financing schemes to address the identified needs.
“The Lack of healthy mortgage system has made home ownership in Nigeria the lowest in Africa. Housing penetration is very low in Nigeria and this needs to be addressed”, he added.
Source: The Guardian