Mr. Kehinde Ogundimu, Chief Executive Officer of the Nigeria Mortgage Refinance Company (NMRC), has highlighted the challenge faced by Nigerians in providing the 20% equity down payment required to secure a mortgage.
Speaking at the Nairametrics industry outlook on the real estate and construction industry, Ogundimu noted that this inability serves as a major barrier within the mortgage market.
He emphasized that this challenge is not unique to Nigeria but is a global issue. Globally, it is estimated that it would take 70 years to save the required 20% equity. To address this, the NMRC initiated a partnership with the National Pension Commission (PENCOM), proposing that Nigerians be granted access to 25% of their Retirement Savings Accounts (RSA) to facilitate mortgage acquisitions.
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Through this partnership, a greater number of Nigerians can now access 25% of their RSA, helping them meet the mandatory 20% down payment requirement. Ogundimu also addressed other obstacles within the real estate and construction sector, highlighting interest rates as a predominant challenge. He explained that while interest rates are a macro issue beyond the control of NMRC, the company has implemented measures to streamline processes and reduce turnaround time.
“We developed the model mortgage and foreclosure law which streamlines processes, making it easy and cheap. You can now get your permits early. Time is money in construction,” Ogundimu stated. He emphasized that while NMRC cannot directly impact interest rates, it can offer advice to policymakers on structural adjustments needed in the sector.
