By Yinka Kolawole
The Lagos mortgage draft bill currently with the State House of Assembly will be ineffective unless the state government creates an Intervention Fund to drive long term mortgage financing.
The Mortgage Banking Association of Nigeria (MBAN), umbrella body of primary mortgage institutions (PMIs) in Nigeria, stated this in its memorandum submitted to the Committee on Finance of the Lagos State legislature.
In the memorandum, MBAN stated â€œThe current approach to home-ownership in Nigeria is predominantly on a cash-and-carry, rather than mortgage credit basis. This has stunted the evolution of a mortgage culture in Nigeria and has also hindered the use of mortgage financing as a vehicle for effectively meeting up to government housing development policies and by extension, affected the overall development of the Nationâ€™s economy.
â€œOwing to the high population growth, Lagos State needs well over 250,000 new housing units per annum for the next 20 years in order to reduce the current deficit. However, going by the average income of the Lagos State middle-class citizens, this feat cannot be achieved without infusion of Intervention Fund to drive long term mortgage financing.
â€œOn the strength of the challenges posed to housing in Lagos as already stated, MBAN welcomes the idea of the state government aimed at regulating mortgage and related matters, through the Mortgage and Property Bill 2009.
â€œWe want to reiterate to the Lagos State House of Assembly that the draft bill should take due cognizance of the fact that the operations of PMIs are supervised and regulated at the federal level by various agencies (through their Acts) including the Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC), to mention a few.
â€œAs a result, the powers of the board relating to the control of PMIs, as contained in the draft bill could only be limited to the involvement of those institutions in the various activities listed in the bill.
â€œAlso, the potentials for provision of affordable housing to the teeming populace in Lagos State are enormous by the provisions in this bill. However, in the absence of Clear Intervention Funding for Housing Development from the Lagos State government, through the Lagos State House of Assembly (LSHA), perhaps in partnership with the private sector, the bill becomes of no effect.
â€œMBAN re-affirms the commitment of its member-institutions to extend maximum co-operation to the proposed board and the Lagos State government to achieve the noble goal of providing affordable housing to citizens of Lagos State, through durable mortgage financing arrangements.â€
It would be recalled that the Lagos Mortgage and Property Bill 2009 is sponsored by the Lagos State government for a law to establish the Lagos State Mortgage Board, to encourage the growth of mortgages in real property and for the regulation of aspects of consumer loans for acquisition of property and realisation of securities and other connected matters.
The Committee on Finance of the Lagos State House of Assembly held a public hearing on the bill last month, during which it requested stakeholders and interested members of the public to send in their memoranda as inputs preparatory to passing the law.