The World Bank Approves Funds to Support Nigeria’s Expansion of its Housing Finance Market
September 26, 2013
WASHINGTON, September 26, 2013 — The World Bank Board of Directors today approved a $300 million IDA* credit to boost Nigeria’s efforts to provide affordable mortgages for middle-income and lower income families.
“The Nigerian financial system has quickly grown and is becoming increasingly integrated into the regional and global financial systems,” said Nigeria Marie Francoise Marie-Nelly, the World Bank Country Director for. “Today’s project will further the country’s economic success, strengthen the nascent mortgage market and create much-needed jobs in construction, housing improvement, finance and other sectors throughout Nigeria.”
Today’s financing will support Nigeria’s Housing Finance Project. The project is an integral part of the Government’s Transformation Agenda and is designed to provide access to long-term financing for first time homeowners and new homeowners with lower family incomes, including people who are self-employed in the micro finance market segment.
The project will support the establishment of a mortgage refinance company, also known as a Nigeria Mortgage Refinance Company that will generate long-term funds for home mortgages. It will also establish a mortgage guarantee product, targeted at lower income borrowers that will be used to guarantee some of the credit risk for this special group of lenders.
Todays’ funds will also support the development of a new Home Microfinance industry in Nigeria that will serve as a pilot designed to demonstrate a sustainable business case for this activity.
“This project will directly benefit new home owners who struggle to find available cash to purchase a long-term mortgage and increase incomes for Nigerian families through the creation of new jobs,” said Michael Wong, the World Bank Task Team Leader for the project.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing zero-interest loans and grants for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 82 poorest countries, 40 of which are in Africa. Resources from IDA bring positive change for 2.5 billion people living on less than $2 a day. Since 1960, IDA has supported development work in 108 countries. Annual commitments have increased steadily and averaged about $16 billion over the last three years, with about 50 percent of commitments going to Africa.