The Nigeria Mortgage Refinance Company (NMRC) plays a crucial role in the mortgage and housing sector of Nigeria by providing liquidity, long-term funding, and risk management solutions to mortgage lenders. Established in 2013 as a Public-Private Partnership (PPP) initiative, the NMRC is a key player in addressing the housing deficit in Nigeria by enhancing the accessibility and affordability of mortgage loans.

Major Role in the Nigeria Mortgage and Housing Sector

The NMRC’s primary function is to refinance mortgage loans originated by primary mortgage banks (PMBs) and commercial banks, thereby providing these institutions with the necessary liquidity to extend long-term mortgage loans to Nigerian homebuyers. By doing so, the NMRC helps to reduce the interest rates on mortgages and extend the maturity periods, making homeownership more accessible to a broader segment of the population.

The NMRC operates by raising long-term funds in the capital market, which it then uses to purchase mortgage portfolios from PMBs and commercial banks. This process enables these institutions to free up their balance sheets and issue more mortgage loans to new customers. The NMRC’s refinancing model is crucial in bridging the funding gap in the housing finance sector, thereby contributing to the stability and growth of the mortgage market in Nigeria.

Moreover, the NMRC plays a vital role in standardizing mortgage practices in Nigeria by setting uniform underwriting standards. These standards ensure that mortgage loans refinanced by the NMRC meet specific criteria, which enhances the quality and security of mortgage assets in the country. The standardization process also instills confidence among investors and stakeholders in the mortgage sector.

Products Offered by NMRC

Mortgage Refinance Facility:

This is the NMRC’s flagship product. It provides long-term funding to mortgage lenders by purchasing eligible mortgage loans from them. The refinance facility allows PMBs and commercial banks to extend the tenure of their mortgage loans, reduce interest rates, and enhance their lending capacity. This product is designed to help lenders overcome the challenges of short-term funding, which has historically hindered the growth of the mortgage market in Nigeria.

Mortgage-Backed Securities (MBS):

The NMRC issues mortgage-backed securities to investors in the capital market, secured by the mortgage loans it has refinanced. These securities are attractive to investors because they offer a steady return on investment and are backed by high-quality mortgage assets. The issuance of MBS by NMRC also helps to deepen the Nigerian capital market by introducing new investment products.

Capacity Building and Technical Assistance:

The NMRC provides capacity-building programs and technical assistance to mortgage lenders to improve their operational efficiency and compliance with international best practices. These programs include training on underwriting standards, risk management, and the adoption of technology in mortgage origination and servicing.

Risk Management Solutions:

To mitigate risks associated with mortgage lending, the NMRC offers credit enhancement and risk management products. These products are designed to protect lenders from potential defaults and ensure the sustainability of the mortgage market.

Impact on the Housing Sector

The NMRC has significantly impacted the Nigerian housing sector by making mortgage financing more accessible and affordable. By providing liquidity to mortgage lenders, it has enabled the extension of mortgage loans to a larger number of Nigerians, particularly those in the middle and lower-income brackets. The NMRC’s activities have also contributed to the overall growth of the housing market by encouraging the development of more housing units and stimulating demand for homeownership.

Contact

17 Sanusi Fafunwa, Victoria Island, Lagos.
+234 91-3-957-6829
+234 91-3-957-6830
info@nmrc.com.ng