World Bank, CBN seek new law for model mortgage regime

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The World Bank and Central Bank of Nigeria (CBN) have initiated collaborations in efforts to review the existing Land Use Act laws and create enabling environment for the mortgage activities to thrive in the country.

The move aimed at enhancing housing delivery in the country is coming on the heels of an affirmation that Nigeria has about 16 million housing deficit, which needs to be closed.

The World Bank has already extended a $300 million lifeline credit to the country for the Nigerian Housing Finance Programme (NHFP) meant to boost mortgage finance and refinancing.

Beside the guarantee by the apex bank, yest erday, the two financial institutions, in partnership with the Nigerian Mortgage Refinancing Company (NMRC) and the Federal Mortgage Bank of Nigeria (FMBN) as well as the Federal Ministry of Justice, flagged off the review of the Nigerian Land Use Act.

This was with a view to removing obnoxious clauses that impede investment in mortgages and create a fertile ground for growth, as is the case in other climes.

The law review, which started Monday at a two day workshop, is seeking a new model mortgage that will also address the knotty issues of foreclosure.

The brainstorming is under the theme: “Creating an enabling environment for the growth of the housing and mortgage sector: The need for land and law reform”.

The Director of Banks and Other Financial Institutions Supervision Department of CBN, Tokunbo Martins, said that the apex bank “is underwriting part of the $300 million risk of the NHFP.”

According to her, “CBN is the project implementing entity of the NHFP and the NHFP is meant to re-fund the primary and secondary markets for mortgages. It is a public-private partnership and we have a loan from the World Bank. So, CBN itself is not putting anything in directly.”