Following calls for the government to simplify the process of homeownership, more states are taking steps to reform mortgage and land administration.
To make access to land, housing and mortgage less cumbersome for their indigenes, about 13 states are expected to adopt the Model Mortgage and Foreclosure Law (MMFL) between now and the first quarter of 2019. The MMFL is an initiative of the Nigerian Mortgage Refinance Company which calls for the creation of a state mortgage board as a single window clearance mechanism to facilitate accessible and affordable mortgages for residents of the state.
The PUNCH gathered on Friday that eight states – Edo (which has established a mortgage board) Akwa Ibom, Cross River, Kogi, Benue, Plateau; Kebbi; and Gombe – will conclude the process by November.
Ogun State, on the other hand, is awaiting the governor’s sign-off to adopt the law while four other states are said to be looking at adopting the law by the first quarter of 2019. Lagos and Kaduna states have enacted their own mortgage model law, and have worked on their property rights and land digitisation.
In most developed countries, mortgage plays an important role in homeownership. But in Nigeria, the process as well as the interest rate impede the growth of the mortgage industry, which is said to currently contribute only about 0.5 per cent to the country’s Gross Domestic Product. In some countries such as South Africa, mortgage contributes close to 30 per cent to the GDP.
When adopted, the MMFL is expected to create an enabling environment for states to provide affordable housing for their citizens by de-risking the housing and mortgage sector and unlocking its potential for economic growth.
According to the provisions of the law, the ease of doing business index for the states affected will be improved and this will in turn further improve the business case for new investments in housing and catalyse access to finance for citizens of the states.
This, it was gathered would lead to increasing taxable income to the states as well as improvements in the internally generated revenue profile.
The law will also make provision for the establishment of mortgage board and mortgage registry; reduce the time stretch it takes to issue Certificates of Occupancy by delegating top government officials to sign the governor’s consent rather than the governor alone; and make land ownership transfer easy, among other benefits. Read more<<<<<