Grappling with the problem of access to long-term fund for housing finance and ineffective land policy, mortgage operatives have jump-started a novel scheme that is expected to chart a new course towards re-vigoration of the industry.

The scheme by the Mortgage Banking Association of Nigeria (MBAN) would empower licensed firms to solicit for borrowers and negotiate, find and place mortgage and provide advisory services for a fee. A duly licensed corporate firm is expected to employ licensed mortgage brokers/ agents for the purpose of mortgage brokerage activities.

Recently, the Central Bank of Nigeria (CBN) had authorised MBAN, as a self-regulatory body to embark on registration and supervision of the mortgage brokerage operators in the mortgage banking sector. Apart from regulation services, MBAN’s duties include, monitoring and enforcing discipline/ compliance within the sector to protect the interest of the public as well as provide standards by which mortgage brokerage activities will operate.

Specifically, the mortgage banking association has issued license to five mortgage brokerage companies to drive the scheme. They are Esteem Management Consult Service Limited; Real Estate Brokerage Company Limited; Vizar Homes Limited; Primax Mortgage Brokers Limited and Colindale Mortgage Brokers Limited.

MBAN President, Dr. Femi Johnson who confirmed the development at the 11th Mortgage Banking Sub-Sector CEOs’ Annual Retreat held in Lagos, recently, envisaged that the new addition to the sub-sector would positively support service delivery in housing finance.

He said: “The five mortgage brokerage operator companies that had successfully scaled through rigours of registration before the Association, based on the fact that the changing landscape of the Nigerian mortgage/housing finance sub-sector has highlighted the critical need for mortgage brokers to join the train of novel services to enhance the efficiency of Housing Finance delivery for Nigerians.”

On the retreat, which theme was ‘Sustainability of the Mortgage/Housing Sub-Sector: Critical Issues, Impediments, Prospects and Potentials’, Johnson explained that the main is for the association and its constituent member-mortgage banks and brokerage companies to pro-actively address issues that would strengthen the capacity and capability to deliver on their mandates, with a view to satisfying the yearnings of numerous customers and stakeholders.

“We would need to come together to harness the strength in our numbers and leverage on the force of collective efforts in order for us to seek sustainable, innovative and novel routes towards achieving our objectives.

“Our operating environment is gradually emerging to become more favourable for our businesses, it would continue to attract more participants and hence generating more intense competition. With respect to the increasing competition from other stakeholders in the Financial Services Industry, the mortgage banks and mortgage brokerage would need to work together.”

For Primary Mortgage Banks (PMBs) to remain sustainable, the Nigeria Deposit Insurance Corporation (NDIC) said, the operators should reinvent their business model by offering what the market needs, at a fair price at right time while developing a robust consumer protection machinery.

“On the part of supervisors, emerging guidelines should reflect market dynamics with an eye on effective Enterprise Risk Management aimed at mitigating credit, operational and market risks, according to the Managing Director, Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim.

He reiterated the ability of NDIC to sustain its efforts in ensuring that all insured institutions are put on the path of sustainable growth as development depends largely on the premium contribution by all the insured institutions.

Ibrahim disclosed that one of the challenges faced by the supervisors is the failure of the PMBs to render prudential returns as at when due. NDIC appealed to the banks to pay their annual premium promptly “We urge MBAN and the PMBs to ensure that their activities are reported monthly. There is a zero tolerance for late/non-rendition of Returns. It is on record that some PMBs are yet to meet their premium payment obligation as at when due.”

He urged PMBs to broaden their product offerings, especially to the middle and low income to stimulate financial inclusion. “As a matter of deliberate strategy, houses should be designed and provided for the poor. Also, affordable accommodation should be designed for the disadvantaged women group. A deliberate measure should be taken to simulate community cooperative societies to develop saving habits that will attract loan for mortgage,” Ibrahim said.

The NDIC boss stated that PMBs in Nigeria can create significant impact, if they adhere to recommended corporate governance practices based on effective and sustainable risk management practices as instituted by regulatory authorities.