Mr. Ayo Olowookere is the President, Mortgage Banking Association of Nigeria (MBAN). In this interview with journalists, Olowookere, who doubles as the Managing Director of Imperial Homes Mortgage Bank, spoke about the mortgage banking sector in Nigeria, especially the sector’s challenges. He calls for collaboration among industry’s stakeholders and suggests what the government should do to make the sector functional. DAYO AYEYEMI was there. Excerpts:

Before you came into this position, you had your view or vision. Can you let us in on that?

Thank you very much. Why I came into the fray essentially was to answer the call of my colleagues in the industry. We needed fresh ideas on the table. This is a very important time for mortgage banks, especially those of us that have been in the industry. I’ve been in it for 10 years now, and 10 years at the top, running two mortgage banks as managing director. For the first time, I’m seeing a sort of government shift—being intentional and focused on mortgage banking. We saw the Federal Mortgage Bank talking about recapitalisation. We saw the government stepping up, finally funding Family Homes with over a billion dollars from the African Development Bank. We also saw the Ministry of Finance Incorporated closing on its first fundraising—up to $50 million.

So there’s a lot of activity in the background of the housing sector, especially from the government. We’re also seeing the government actively playing in the supply side—like the Renewed Hope housing scheme by the Federal Ministry, where they’re planning to develop 100 or 1,000 housing units. A lot of business is happening, and we thought, look, this is the time to put our house in order and be part of what’s happening. This is a pivotal moment for us in the mortgage banking industry.

We also have registered workers—members of the association. That is the focus of why I think this is the time to be here.

You must have noticed certain gaps in the sector. The mortgage sector hasn’t functioned very well. The market isn’t very active. What did you notice was lacking?

It’s a gap in funding. The mortgage banking sector is not really active because there’s no availability of long-term, sustainably priced funds for mortgages. These products are very long-term. Over the last two or three years, we’ve seen rates go up due to monetary policy actions. This has affected the availability of well-priced housing funding sources because mortgage banks are in the same market, competing with everyone else for money.

To create risk assets—which mortgages are—you need long-term capital. But the current structure doesn’t support mortgage banking. So mortgage banks have to improvise. We’ve been looking at all lending and financing opportunities, which we’ve been doing for a long time. Before, we were restricted to the Federal Mortgage Bank, but now there are more options available.

On the regulatory side, I’d say there’s been a disproportionate focus on commercial banks—reasonably so, because they account for over 90 percent of activity in the financial services space. But we’re now seeing renewed interest from regulators, which is welcome. They are now opening their doors and listening to us. We’re not asking for favours, just fairness, and to be able to operate without being unfairly limited.

Getting a mortgage in Nigeria is extremely difficult. Some people blame it on poverty, others say PMIs are under-equipped. What exactly is the problem?

There are many issues, but I’ll highlight a few. One is the problem of effective demand. High interest rates make mortgages unaffordable for many. So half the people who walk into a mortgage bank get discouraged and walk away. They might have, say, ₦10 million and need a mortgage of ₦30 million, but if they’re not accessing affordable loans through institutions like the Federal Mortgage Bank or Family Homes Fund—who offer rates blended at 16 per cent or so—the monthly payments become overwhelming.

Another problem lies with policy—issues around property finance and land documentation. Perfection of title, planning permits, building approvals—these are all hurdles. The formalisation of these processes discourages people. It’s long, tedious, and expensive.

We also face competition for funding from other parts of the financial sector. Commercial banks, microfinance institutions—we’re all chasing the same money. That limits what we can do. There has to be an intentional approach from the government, not just to support the supply side (as they always talk about) but also the demand side.

The government shouldn’t be the one building houses. They should support the supply side by empowering the demand side—people who want to buy homes. At a point, the Central Bank gave subsidies to commercial banks, identifying them as critical to the economy. If they had done that for mortgage banks—mortgages at 5-10%—a lot would have changed.

If the deficit is even just 9 million houses, at ₦15 million per house, that’s ₦45 trillion. That’s a huge opportunity—manufacturing, services, and finance would all benefit. This could help Nigeria hit its $1 trillion economy target.

Now, as the President of MBAN, what would you recommend the government do to make this sector more functional?

On the fiscal side, the government needs to harmonise efforts. Right now, too many players are doing uncoordinated things. Ministries and agencies are working in silos. Sometimes, they even view each other as competitors, which should not be the case.

We need to sit down as stakeholders—government and private sector. Many in government don’t understand this market as well as practitioners who’ve been in mortgage banking for 20–30 years. We see the customers every day. We did a launch for one of our platforms and over 260 people showed interest. We know why people can’t qualify and what support they need. But the government rarely seeks collaboration proactively—it’s always reactive.

For example, NMRC was successful because mortgage banks were involved in its creation. It was bottom-up. Mortgage banks invested and helped shape the model. NMRC now provides cheaper funding at around six percent. The Federal Mortgage Bank has also evolved because of its open-mindedness and willingness to collaborate.

We’ve also been working with Family Homes Fund—they initially weren’t inclusive, but they’re learning to engage mortgage banks. Collaboration must be intentional and continuous. Nigeria is due for housing finance reform—just like we had telecoms reform, pension reform, and subsidy reform. Reforms like that created jobs, attracted investment, and transformed sectors.

We need a similar break from the past in housing finance. We need leadership reform and to update legislation. For example, the National Housing Fund Act is from 1992. The Pension Reform Act came 12 years later—and look at the difference. The pension industry now manages ₦24 trillion from 16 million contributors. Compare that to the NHF, which has only half a trillion despite existing longer.

Let’s say we start this reform today—it could become our legacy. Nobody remembers who was the Minister of Housing in 2018, but everyone remembers the telecoms reform and the people behind it. We have an opportunity to do something meaningful.

When the President was campaigning, he said he’d collapse all the fragmented institutions in the mortgage sector into one efficient structure. But now we’re hearing about new agencies. What do you suggest?

At the implementation level, many things are backed by Acts of Parliament. So reform isn’t simple—you need legislative changes, and that comes with ethnic and political complexity. But without going into those intricacies, the Ministry of Housing and Ministry of Finance need to sit with the president and set clear goals—say, “We want to give one million Nigerians access to affordable housing.”

Once the goal is clear, you appoint a presidential task force, like the one on tax, to coordinate everything. That’s what has worked in other sectors. Despite multiple tax agencies, the task force helped harmonise efforts. We need the same approach in housing—one coordinating force with a clear mandate.

Now, let’s come back to your new role as president of the association, how do you intend to make a difference?

We’re all focused on the mission ahead. Of course, I bring new ideas to the table, especially as someone who has been in the industry for 20 years. We’re building on what was inherited and positioning mortgage banks to play a more active role in national development.

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