Three main challenges making it exceedingly tough for everyone working in the mortgage banking sector in Nigeria to thrive includes, the regulatory environment, legislative environment, and microeconomic environment,
Dr. Banjo Obaleye, Managing Director of Infinity Trust Mortgage Bank plc, made this claim in an interview with Africahousingnews during a national workshop of the Association of Housing Corporations of Nigeria (AHCN), in Abuja.
According to Obaleye, most states and the Federal Capital Territory (FCT), have extremely challenging and time-consuming procedures for people and developers to obtain Land title, aside from Kaduna State and Lagos State and a select few other states like Nasarawa, Ogun, and Ekiti.
Adding that all urban lands included in each state’s territory, excluding those owned by the federal government or its agencies, are solely the governor’s to hold in trust for the people and distribute to individuals and organizations for residential use, among other uses, under the Land Use Act of 1978.
This has caused a serious setback for the mortgage banking industry.
Another major obstacle to mortgage banking, according to him, is the two-digit interest loan. Which he claims is extremely impractical to take out a mortgage loan with an interest rate of between 17 and 20 percent for a term of 20 years and ensure that the borrower won’t be burdened by such a crushing obligation.
He stated that the reason his organization supports NHF is because it is the only option that offers mortgage facilities at a single digit interest rate, making it a reliable path for workers to own homes.
Dr Banjo however, noted that the low profit margin is not the priority of his mortgage bank but how to create opportunity for people to have a roof over their head especially for those at the base of the pyramid.