Nobody is qualified for mortgage in Nigeria – CEO Merrybell Group

Emmanuel Abisoye Oyelowo is the Group Managing Director of Merrybell Group which is into real estate and hospitality. In this interview with our reporter, he talks about the challenges in the housing sector. Except: One of the problems with housing in Nigeria is that you have to pay 100 percent upfront before you can own […]

Emmanuel Abisoye Oyelowo is the Group Managing Director of Merrybell Group which is into real estate and hospitality. In this interview with our reporter, he talks about the challenges in the housing sector. Except:

One of the problems with housing in Nigeria is that you have to pay 100 percent upfront before you can own a property, what is your take?

I am an alumnus of Watson Business School, I did international housing finance course there and my eyes got opened to the opportunities that are available. They are massive and if the government will talk to us, those local and state governments, we can guarantee them that they can meet the houses deficit in a very short time and at next to nothing. This is  because there are a lot of multilateral agencies out there that are willing to support us to be able to achieve this milestone.

Take for example, operation habitat, and there are so many of them. But you see our structure here is what is not encouraging. If I get  funding from China for instance, and put up  22 million housing units,   in the next 10-years, I may not be able to sell them. But if we bring in that key factor that is missing, which is mortgage, give me one week and the entire 22 million housing units will be taken. That one week will be for processing.

I was involved in a transaction in the UK and there, somebody is supposed to drop just 10 percent. Because the house was selling  for 180 thousand pounds,  10 percent  is 18 thousand pounds and then spread the remaining for 25 years at 1.5 percent.

As it is today in Nigeria, we don’t have the social mortgage that is supposed to be put in place by the Federal Mortgage Bank or by the Federal Government so what we have is commercial mortgage and commercial mortgage is going at a rate of about 24-25 percent because normal facility today is about 28 percent and above, so how do you survive?

Another problem here is the legal provision  that you cannot spend more than 25 percent of your monthly income on servicing of mortgage.

It is a policy problem or implementation?

I will answer that in two folds; the previous government has worked together with us over time to develop some blue print concerning the  real estate sector.  So we have  the  mortgage refinance scheme. Our problem is one, continuity and secondly, implementation.  So we have enough, it  is implementation that is the issue. So we cannot be relying on government.

How do you see rent to own scheme?

Rent to own is a fantastic idea; it is  mortgage in another form.

The problem that we have is that it is only one state in Nigeria, Kaduna State, that has gotten the legal framework right, which is the law that helps you to repossess.

It is the only one that has been able to get the foreclosure law right.  As the law stands today it favours the tenant so the legal framework  is where the problem is.