Nigeria mortgage agency seeks approval to raise capital

Nigeria Mortgage Refinance Company (NMRC) will seek approval from members by month-end to raise additional equity capital of 28.5 billion naira ($143 million) through a shelf registration programme, the state-backed mortgage agency said on Monday.

NMRC set a price range of 4.50 to 7 naira per share for the first tranche of equity to be raised under the programme worth 6 billion naira.

Nigeria put $300 million of World Bank aid money into a mortgage-backed guarantee last year in a bid to boost lending through the creation of a secondary housing market, which is virtually non-existent in Africa’s biggest economy.

Africa’s most populous nation suffers a housing shortage, with somewhere between 16 million and 20 million new homes needed just to keep up with current demand, according to official figures.

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The NMRC was set up with the aim of lowering mortgage lending rates — currently around 20 percent for a 10-year loan or up to 30 percent for households with lower credit ratings.

The debut general meeting will be held on Aug. 31, the NMRC said in a notice to approve the capital plans. It added that further equity tranches will be approved by members.

Mortgage lending is a small portion of the overall property market. There are about 20,000 mortgages open in Nigeria, the finance ministry has said, none of which are tradable because of a lack of liquidity. None extend beyond 10 years.