NMRC secures $200m funding from U.S for mortgage

The Nigeria Mortgage Refinance Company (NMRC), a private sector-driven mortgage refinancing company with the purpose of promoting home ownership for Nigerians while deepening the primary and secondary mortgage markets has secured  $200 million in funding.

The Fund is from the U.S. International Development Finance Corporation (IDFC) for Affordable Mortgage Financing that is part of a $228 million Blended Financing Transaction Arranged by MiDA Advisors and Stanbic IBTC Capital, a member of Standard Bank Group.

NMRC entered into this partnership to address the liquidity gap in Nigeria’s mortgage finance market.

It also partnered with U.S.-headquartered MiDA Advisors and Johannesburg-headquartered Standard Bank Group to co-create a blended finance solution to mobilize long-term financing at scale.

The transaction  include a $200 million loan from the U.S. International Development Finance Corporation (DFC) and $28 million in financing sourced from local financial markets, securing a total of $228 million long-term blended financing.

The transaction and strategic partnership with DFC will provide the needed liquidity to support the country’s quest to bridge the housing deficit while driving more equitable economic growth and development.

In addition, the facility will be disbursed through on-lending to primary lending institutions, i.e. commercial banks and primary mortgage banks, to refinance or pre-finance eligible mortgage loans to qualifying mortgage borrowers across Nigeria.

According to the National Bureau of Statistics (NBS), 63 per cent of Nigerians are multi-dimensionally poor. Therefore, the financing is expected to provide vulnerable population segments with access to credit facilities, including Nigeria’s large informal sector, low-income earners, and women who face extreme difficulties in their bid to own a home.

Specifically, approximately 20 per cent of the loan will be allocated to informal and low-income borrowers, while an estimated 40 per cent of the mortgages to be refinanced or pre-financed will be those underwritten to women as borrowers or co-borrowers.

Reacting to the approval of this loan, the Managing Director and Chief Executive Officer of NMRC, Mr. Kehinde Ogundimu, expressed gratitude to DFC, noting that it is clear proof of NMRC’s positioning as a key institution within the housing ecosystem.

“This transaction will certainly enhance our efforts to provide affordable long-term housing finance in a manner that will impact the overall sector. It shows that DFC and, indeed, other local and international financing institutions have a lot of trust in our capacity to manage long-term facilities that will make a tangible impact on the lives of Nigerians.

“The keen focus on low-income earners, the informal sector, and women is indicative of the direction of our efforts. As an institution, we are committed to driving equitable access to housing credit facilities thus enabling vulnerable Nigerians to achieve their homeownership dreams,” he said.

MiDA Advisors Chief Executive Officer, Mr. Aymeric Saha, said: “We are very pleased to partner with NMRC and Standard Bank to arrange another transformative housing finance solution that will impact over 6,000 households in Nigeria. Through this transaction, we are demonstrating here again the power of partnerships with Africa’s leading companies such as NMRC to tackle social infrastructure financing needs in the region.”

Chief Executive of Corporate and Investment Banking at Standard Bank Group, Mr. Luvuyo Masinda,  said: “This transaction demonstrates the bank’s commitment in driving Africa’s socio-economic development through the facilitation of sustainable investment on the continent. We understand the needs and challenges of Africa’s people and continue to deliver innovative solutions to address these. This is truly an incredible transaction with a positive impact to Nigeria and the continent.”

Also commenting on the transaction, Oladele Sotubo, Chief Executive of Stanbic IBTC Capital Limited, the wholly owned investment banking subsidiary of Stanbic IBTC Holdings PLC said: “Stanbic IBTC Capital is delighted to have worked alongside MiDA Advisors to facilitate this landmark financing aimed towards enhancing accessibility and affordability of mortgages in Nigeria. The objectives of the transaction are well within the Standard Bank Group’s purpose in driving Africa’s growth, and we are extremely proud to be party to the transaction.”