Nigeria’s FMDQ Securities Exchange Plc is working on a plan to kick-start mortgages to boost trading on the nation’s capital markets.
“The lack of housing finance is one of the reasons why our capital market has not grown as it should,” Chief Executive Officer Bola “Koko” Onadele said told Bloomberg in an interview. “We should be talking of 30-year mortgages for Nigerians. If you want 70% of the people to own their own houses, they can’t borrow at 20 per cent”.
Most people save all their working lives to be able to buy or build a home, leaving them with little savings to invest in financial markets. On the other side of the spectrum, lenders in the country rely on short-term deposits when mortgages require long-term financing.
There are only about 50,000 homeloans in Africa’s most populous country of 200 million where poverty and the lack of a formalized title-deeds registry has led to a shortage of at least 17 million houses. Rapid urbanization is also causing a proliferation of slums and shanty towns, while most homes consist of informal structures on land passed down through generations.
FMDQ is now working on a blueprint it is developing with the support of other financial institutions, including International Finance Corp., Central Bank of Nigeria, Nigeria’s Securities and Exchange Commission and the National Pension Commission, that the entities will present to President Muhammadu Buhari within the next year, Onadale said.
