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Stakeholders Launch Firm to Fund Mortgage Banking Sector

Goddy Egene

The Nigerian mortgage banking is set to witness a major boost following the launch of Mortgage Warehouse Funding Limited(MWFL) with the sole objective of providing short-term local currency, competitively-priced funding to mortgage banks in a bid to enhance their mortgage origination capacity.

The special purpose vehicle (SPV) was incorporated in December 2014 and initially sponsored by a group of eight member mortgage banks (MMBs) as mobilised by Mortgage Bankers Association of Nigeria (MBAN). Other parties are: the Nigeria Mortgage Refinancing Company Plc (NMRC) as liquidity and off-take provider; CitiHomes Finance Company Limited as programme manager; Lion’s Head Global Partners, London through its African Local Currency Bond Fund as the initial subordinated commercial paper subscribers; and Dunn Loren Merrifield Advisory Partners as financial adviser and arranger.

According to the promoters of the company, its activities are aimed at complementing those of NMRC in that whilst NMRC is licensed to provide long term matching funding and liquidity to the mortgage sector via secondary market refinancing from the bond market, MWFL will provide short term/interim funding for mortgage origination financing to the mortgage banks.

MWFL will provide this short term financing, through the issuance of high quality investment grade rated Senior and Subordinated Commercial Paper Notes under an initial N20 billion Naira Programme currently undergoing registration at FMDQ OTC Securities Exchange.

Introducing MWF during the launch in Abuja, Director, Other Financial Institutions Supervision Department(OFISD) at Central Bank of Nigeria Mrs. Tokunbo Martins said “MWF is a welcome idea. It is expected to address the draught of funds available for mortgage origination. ”

According to President, MBAN and Director on the Boards of both NMRC and MWFL, Mr. Niyi Akinlusi, “MWFL is expected to significantly increase the fire-power available to mortgage banks for their daily operations.”
Confirming the synergy of member stakeholders in MWFL, the Chief Executive Officer of NMRC, Prof. Charles Inyangete, said: “MWFL is part of the economic housing model being put in place to create an end to end financing of the entire mortgage process.”

Also, commenting Chairman MWFL, Mr. Sonnie Ayere, said: “The launch of this conduit will see us begin to de-risk construction finance as MWFL becomes the funding source of the off-take often required by commercial banks to fund developers.”

With the successful completion of this landmark issue, MWFL will connect the Nigerian mortgage market currently plagued with low deposits level and high cost of alternative sources of funds, to the money market by efficiently intermediating short-term funds from the money markets towards the provision of housing finance in Nigeria.