By Chris Ochayi & Johnbosco Agbakwuru

The Federal Government has commenced a working relationship with the World Bank and the International Finance Corporation, IFC, to boost mortgage financing in Nigeria.

Director General of Securities and Exchange Commission, SEC, Ms Arunma Oteh, disclosed this in Abuja, last week, at the end of a three day training of SEC staff on securitization, mortgage-backed securities, covered bonds and liquidity facility. She said the initiative will support housing with medium and long term financing, by increasing the number of mortgage holders in the country from 20,000 to 200,000.

Oteh said the tripartite initiative known as the Mortgage Re-financing Facility is being packaged by the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, who has brought in the World Bank and the IFC to help increase mortgage in Nigeria.

According to her, the federal government, in looking at social housing, has embarked on an initiative to support housing with medium and long term financing. She said the initiative is to address concerns with the cost of mortgage financing. “Mortgage rates are very expensive now, the federal government is working on the initiative that will be launched later this year,” she said.

The SEC DG expressed shock that Nigeria has only 20,000 mortgages, but said that with the planned securitization, banks can move mortgage out of their books. She added that securitization is an important tool for transformation which compelled SEC to organize the training for its staff to understand securitization which is an area of opportunity.

Oteh also disclosed that there is about “N100 million in collective investor fund” and she encouraged retail investors to leverage their participation in the collective investor fund to enable them diversify their investment portfolio in the market.”

She revealed that the Board of SEC has set up a National Collective Investor protection fund, to protect investors in the capital market against sharp practices. “Whenever there is any complaint the complaints are resolved immediately. But we are waiting for the market to adopt it. We also want the resolutions to happen quicker than they do now.”

She said SEC receives over a thousand complaints a year. To address this problem, Oteh stated that “there will be severe consequences for infractions in the capital market, SEC will not permit any wrong-doing and will match words with action.”

Nigeria’s capital market she said must have stringent enforcement regimes to build integrity. The main facilitator at the training, Prof. Graham Penn of the University College, London said securitization relates to securities  that are  issued and collateralized or backed by hard assets e.g. income stream from power and road projects.