The Securities and Exchange Commission (SEC) has stated that the non-interest segment of the capital market is capable of financing the housing sector.
This, SEC said, will lead to better well-being of the citizenry as well as general performance of the other sectors of the economy.
The director general of SEC, Mr. Lamido Yuguda stated this during a webinar with the theme: ‘The Non-Interest Capital Market as Panacea to Mortgage Financing in Nigeria.’ He said, it is a well-known fact that financing residential and commercial real estate to enhance societal well-being and unlock economic opportunities, remains a global challenge.
Yuguda said he considers the theme timely and relevant in the discourse of issues pertinent to the growth and advancement of the Nigerian capital market and the economy as a whole.
According to Yuguda,”I have observed with delight, the attention this webinar has generated, and come to the conclusion that it is a clear indication of the keen interest in the potentials, that the on-interest finance segment holds in furthering the development of the capital market and the growth of our economy.
“According to a World Bank study, Nigeria’s housing sector requires an investment of about N59.5 trillion to bridge the 20 million housing deficit that is increasing yearly. Undoubtedly, this shows a huge untapped investment opportunity in the Nation’s real estate sector.”
The SEC DG stated that, governments at both federal and state levels, and businesses in Nigeria have been tapping various available sources of financing, including capital market products for funding real estate developments, saying the methods of finance have various associated costs, some which are deemed to be high.
He emphasised that the Nigerian capital market provides a platform for mobilising long-term funds for real estate investments to complement the mortgage funding sources by commercial banks, Primary Mortgage Institutions, non-governmental organizations, cooperative societies and international finance institutions.
“The capital market creates investment opportunities to enhance the flow of low-cost, long-term funds to the real estate sector through investment vehicles such as Real Estate Investment Trust Schemes (REITs) and Mortgage-Backed Securities. These instruments are usually traded on recognised exchanges,”he said.
Speaking, the managing director/CEO of the Federal Mortgage Bank of Nigeria, Mr. Madu Hamman, stated that the non-interest financial products have gained a lot of interest by investors in Nigeria and globally and could aid housing finance sources and expand the frontiers of home ownerships through non interest finance sources.
He said the engagement would go a long way in giving the capital market the needed boost to unbundle funds that were hitherto not accessible to Nigerians, adding that, it is obvious that the Nigerian economy is on the verge of experiencing a tremendous transformation in this regard.
Hamman said, the sourcing of non interest funds from the capital is very necessary for seamless operations as funds sourced from interest-based facilities cannot be leveraged to deliver on non interest mortgage transactions.
In his remarks, managing director of Nigerian Mortgage Refinancing Company, Mr. Kehinde Ogundimu said there is no way the nation can meet the housing deficit without having the non interest services sector actively participating in it and commended the SEC on the initiative.
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