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.
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.