LEVERAGING TECHNOLOGY TO INTEGRATE A FRACTURED HOUSING MARKET:
NMRC leverages technology and business process innovation as pivotal tools for building a modern housing finance market for Nigeria.
In line with the mandate to remove barriers to homeownership and build a sustainable culture of efficiency in the Nigerian housing market, NMRC deploys its deep knowledge and understanding of the industry to introduce new technological innovations and processes that are at par with global standards.
Since NMRC commenced operations in 2015, we have recorded significant milestones in this direction.
NMRC’s Housing Market System
NMRC’s Housing Market System is Nigeria’s first mortgage management technology infrastructure proffering an end-to-end solution for the housing finance market in Nigeria. The system is designed to address the barriers created by the cumbersome processes surrounding home ownership in Nigeria.
The HMS infrastructure integrates the financing operations of the key components of the entire housing value chain from construction finance, to primary mortgage origination and administration to secondary market mortgage refinancing.
By enabling the seamless integration of all stakeholders in the housing finance ecosystem, their business systems and processes, the HMS enhances the efficiency of operations of the housing finance sector, deepening the market and growing access to affordable home ownership in Nigeria.
NMRC’s HMS also integrates a Mortgage and Housing Market Information Portal (HMIP) to help address the critical gap in credible data on the mortgage and housing market in Nigeria. Developed in collaboration with the National Bureau of Statistics (NBS), the Central Bank of Nigeria (CBN), Federal Mortgage Bank of Nigeria (FMBN) and Mortgage Banking Association of Nigeria (MBAN), the portal is the go-to technical platform that provides an interface for easy access to real-time and live information on housing finance, property development and ownership.
Blockchain-powered Technology System for Reliable Land Titling
NMRC has also tapped blockchain technology’s capacity for tamper-proof record keeping, to build a robust national asset registry system for driving real estate transactions. The innovative platform, built for homebuyers, land service providers, banks, and property developers eliminates cases of double titles for the same piece of land by ensuring that information on verified land titles are stored in immutable digital registries and constantly cross-checked by a network of computers.
Some of the key benefits of the block-chain powered registry system include creating a single source of truth of ownership status to guarantee title authenticity and reliable online title verification. It also ensures transparency of land titles, reduces potential for land disputes as well as the costs and transaction time for land processing.
National Real Estate Collation Initiative
NMRC is working with market stakeholders to create a National Real Estate Data Collation & Management Program (NR-DCMP) that will provide industry-wide data on real estate activities in Nigeria. The program is specifically developed to create a data repository on real estate and housing development across different value chains for use by policy makers, investors and the Nigerian public. The information will include administrative data, activities of housing developers and the affordability of off takers clustered by their states of operations.
Stakeholders on the project include the Real Estate Developers’ Association of Nigeria (REDAN), Central Bank of Nigeria (CBN), Federal Mortgage Bank of Nigeria (FMBN), Nigeria Mortgage Refinance Company (NMRC), Federal Ministry of Power, Works and Housing (FMPWH), National Population Commission (NPopC), Gesellschaft für Internationale Zusammenarbeit (GIZ), the Growth & Empowerment Program (GEM) of the Federal Ministry of Industry, Trade & Investment (FMITI), National Bureau of Statistics (NBS), and the Value Chain Consultants.
NMRC’s Housing Market Information Portal, HMIP, will host the data and provide the dashboard and executive reports for decision making.
The Nigeria Housing Programme seeks to address the key barrier to developing accessible and affordable housing in Nigeria. It is designed to be implemented with parallel funded projects in land registration and construction sectors by the DFID and GIZ (Deutsche Gesellschaft fur Internationale Zusammenarbeit GmbH).
The Programme has three components and will be most effective if a coordinated approach to all parts of the value chain is implemented. The main areas are a) land and legal framework, b) access to affordable housing finance, and c) housing development and construction.
NMRC is established with the primary aim of resolving access to affordable housing finance, and to act as a focal point for creating an enabling environment for housing finance by playing a strong developmental role in supporting the improvement of land and legal framework and housing development and construction.
NMRC provides mortgage-lending institutions with access to long-term finance at an affordable interest rate, thereby enabling mortgages to be issued by these institutions to Nigerians, at longer tenors and affordable rates. The provision of mortgage loans at longer tenors will provide the average working Nigerian citizens an opportunity to buy a home and conveniently pay for it.
In simple words, NMRC is government inspired but a private sector led effort to provide affordable housing for Nigerians through loans accessed from mortgage and commercial banks. NMRC will contribute to a better alignment of the Housing Finance Programme.
A core strategic objective for the Nigerian government is to achieve broad based and inclusive growth by unlocking markets that have the potential to generate jobs.
The increasing gap in residential homes in Nigeria is now estimated by experts to be in a deficit of about 22million housing units. This presents a huge opportunity for private investment and job creation. It is estimated — following labor impact assessments in countries such as Columbia, Malaysia and South Africa — that at least 5.62 direct jobs can be generated with every new home and 2.48 indirect jobs associated in housing related expenditure
One of the roles of NMRC is to provide a safety net for financial institutions, allowing them to convert illiquid mortgage assets into cash when in difficulties. This allows for a facility such as NMRC to make direct provision of long-term funding into the mortgage market.
In addition, given that the US$250 Million IDA loan is being used as Tier 2 capital, it allows NMRC to raise its own funds through the issuance of long-term bonds to institutional investors.