The Central Bank of Nigeria (CBN) has approved the sum of N200 billion as mortgage finance facility to the Family Homes Fund Limited (FHFL) and targeted at low income earners.
According to a circular, which was issued by the CBN, this financing initiative is to be implemented in collaboration with the Family Homes Fund Limited as the lead developer, as it is introduced to support the Federal Government’s Economic Sustainability programme.
This fund is to fast track the construction of 300,000 homes in the 36 states of the federation and the Federal Capital Territory and to create up to 1.5 million jobs in 5 years.
In addition to the 1.5 million direct construction sector jobs particularly young people on a low income, the programme also has the potential to create further 1 million jobs through its supply chain.
The CBN in the circular stated, ‘’The programme will house up to 900,000 children and adults (at an average of 3 persons/home) on a low income with direct impact on health, education and economic outcomes. Most of these would currently live in informal settlements with shared facilities in unsanitary environments. Towards targeting people on low-income level across the country.’’
On boosting local manufacturing, the apex bank stated, ‘’The programme is designed to utilize at least 90% locally manufacturing inputs and as a result conserve foreign exchange.
“In that regard the programme will deliberately aim to revitalize local manufacture of construction materials including doors and windows, ironmongery, sanitary fittings, concrete products, tiles, glass, electrical fittings/fixtures and bricks etc. for example, it is estimated that the programme will require up to 1.7 m doors, 7m door hinges and locks etc.’’
The funds, which would be released to the Family Home Funds (FHF) by CBN on a project basis is subject to the cumulative maximum limit of N200 billion. The facility type which would be a term loan is to enable FHF finance the construction of social housing units for low-income earners and is for a 3-year tenor from the date of disbursement.
The facility, which is expected to be repaid in not more than 3 instalments within the tenor of the facility, has an interest rate of not more than 5% per annum.
Nigeria In Focus:
Population - 206.6 million (Compared to South Africa's 59.6 million)
GDP: $504.57 billion (Compared to South Africa's $369.85 billion)
GDP Per Capita: $2,465 (Compared to South Africa's $6,193)