FG approves $300m IDA loan to address 17m housing deficit

The Federal Executive Council (FEC) presided over by President Goodluck  today approved $300 million credit facility from the International Development Association in order to addressing the 17 million housing deficit currently in the country.

The housing demand in Nigeria is currently put at estimated 700,000 units annually while only 100,000 is being built for now.

The request was initiated by the Minister of Finance, Dr. Ngozi Okonjo-Iweala, the Minister of Information, Labaran Maku in company of his colleagues, Minister of Interior, Abba Moro; and the Minister of State, Finance, Dr. Yerima Ngama, told State House correspondents.

Ngama speaking more on the loan said, is interest-free financing agreement that will be repaid over 40 years. Okonjo-Iweala is the manage the loan on behalf of the Federal Government while the Attorney-General of the Federation, Muhammed Adoke, would issue the legal opinion required to render the project effective.

He said the objective of the Nigeria Housing Finance Project was to increase access to housing finance by deepening the primary and secondary mortgage markets in the country.

He said, 'The Nigeria Housing Finance Project is aimed at increasing access to housing finance through primary as well as secondary mortgage markets in Nigeria.

'Right now, we only have primary mortgage institutions. So we are going to establish a Mortgage Refinance Company that will benefit from this. Hence $250 million will be devoted to the establishment of the Mortgage Refinance Company.

'The remaining money will also be used for three other companies for the Nigeria Housing Finance Project. The establishment of Mortgage Guarantee Product targeted at the lower income borrower will gulp $25 million. This guarantee will enable people who otherwise cannot provide adequate collateral to access loans.

'There will also be $25million which will be lent to housing micro finance banks so that they too can provide housing finance.

'We know that one of the major issues that is constraining the development of our mortgage industry is lack of technical competence as well as capacity building. So $10 million will be devoted to capacity building and also as technical assistance. This would give them the capability to drive the mass housing scheme', he said.