The Central Bank of Nigeria has disclosed its intention to create a fund for developers in the real estate sector, who have the capacity to repay as at when due. This is according to information contained in a letter by the CBN Governor titled “Turning the Covid-19 tragedy into a new opportunity for Nigeria”.
The detail: The modalities of the funding option are still being figured out, as the CBN work with deposit money banks to identify potential/eligible off-takers. This is being done with the use of the BVN. In other words, the CBN intends to verify the financial capacities of potential off-takers before any loan can be given to them.
Focus on the mortgage sub-sector: The apex bank also disclosed that efforts are underway to provide assistance to the mortgage finance subsector in order to encourage its optimal performance. In the same vein, the CBN will work with state governments to ensure the following:
- That the processes of issuing land titles become faster and less cumbersome,
- Reduce the cost of land documentation, and
- Ensure investment-friendly foreclosure laws.
Note that the document did not disclose exactly how much the housing fund will be worth, or how much each off-taker will be eligible to get. Other conditions of the loan and how potential off-takers may apply for it were also not readily made available.
Why this matter: This is part of the CBN’s effort to reinvigorate the real estate industry through the provision of affordable housing. The loans are expected to provide the much-needed financing that will enable the developers to get to work.
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