Nigerian government has been advised to hand off any idea of mortgages for people in the diaspora.
According to the US-based Affordable Housing and Mortgage Advocate, Mr. Kunle Faleti, the idea was a very sophisticated and complicated process that private sector established banks had to divest from foreign mortgages after incurring losses.
He mentioned UBA NRN Mortgage, AfriBank CID Mortgage, Union Homes Foreign Mortgage among those affected.
He pointed out that the issue that would make the process complicated included forex risk, funding dynamics, loan servicing/collections, loan process (original, credit review, etc), interest rate customer service (with time difference in mind), compliance and regulatory monitoring.
In his suggestion, Faleti said the space should be 100 percent private sector driven.
According to him, government involvement should be limited to creating an enabling environment.
He added that government priorities should revolve around improving “affordability” for homeownership, increase housing supply in partnership with private sector, reduce the burden of down payment and ensure that fair housing rules are enforced.
He pointed out that Nigeria has an estimated population of 300 million people, of which 20 percent are eligible for homeownership through housing finance, which unfortunately has eluded most, post-independence.
“It takes the apex bank responsible for “social housing financing” in Nigeria an average of 36 months to fund a N15 million loan request. The process, including credit review and decisioning, is done manually.
“With the above in mind, should the Nigerian government not invest in human capital, technology, capacity building and market development, to boost and deepen the mortgage penetration for Nigerians in Nigeria, rather than solicit for Nigerians in Diaspora to start contributing towards some funds for mortgage,” he said.
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