Punch, Friday 28 November, 2008
For Nigeria to urgently meet the housing needs of its citizens, the Federal Government and other stakeholders must adopt proactive measures, including creating the right housing product and appropriate finance.
The Managing Director, GS Microfinance Bank Limited, Segun Adaju canvassed the view at the fourth housing conference organized by Pison Housing Company in Lagos. He also urged the government to hands off housing finance and channel money from the National Housing Fund, Federal Mortgage Bank and housing scheme budgets to Micro Finance Institutions for the benefit of low income earners. Adaju who spoke on the topic, Expanding Housing Finance: The Use of Housing Microfinance as a viable funding instrument in Nigeria, maintained that decent housing was the right of every person living on earth.
He, however, noted that in third world countries, housing had remained poor and inadequate for majority of the population, adding that poor housing was evident finance was evident in life tenancy, slums, shanties, overcrowded living spaces and limited housing design options.
But Adaju argued that Low income people can afford virtually any product or service if it is right. They can borrow and repay at the right time. The important thing is to provide loans to finance housing needs and obtain real estate products such as renovation of existing housing; complete on-going building projects roofing and furnishing; expansion of an existing house i.e. add more rooms fence, add facilities e.g. toilet; buy land.
He expressed that even at N5M which is the average price of low-cost houses; many people would not be able to own homes. He said Most houses sold in Nigeria including the so called low cost houses are above N5M. But the income of the an average Nigerian per annum is about N140,000 and more realistically most Nigerians earn less than N100,000.00. Apart from Politicians and those that work in the Banking, Oil and Telecommunications earn a lot more than that and they are less than 500,000 nation-wide. Overall at least 40 million people cannot afford to buy houses.
He cited three examples of microfinance institutions around the world that had successfully provided housing to customers. According to him, one of such is Grameen bank of Bangladesh and has disbursed $121m to date to borrowers. Another example is the Caja Popular Mexicana of Mexico. It started microfinance housing over 50years ago but re-focused 10years ago with a total loan portfolio of about N300m. Repayment period is between 18months and 5years at interest rate of 50-70 per cent per annum.
Mr. Adaju therefore, urged real estate players to design creative economy housing models that would be affordable and accessible to low income market.
