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When there are downsides in an economy such as Nigeria is passing through at the moment, everything and everybody is affected. Besides weakening the economy, economic downturn also weakens purchasing power of individuals and households.
The challenge of life and living in Nigeria is that the managers of the country’s economy don’t seem to have any clue to how to bring about a turnaround. The country appears to be mired in economic inertia.
This means that the hard times are not as much the challenge of everybody as they are the concern about what to do to bring about a turnaround. Of the multi-pronged approach so far adopted to get the economy on its feet again, mortgage, unfortunately, is not in consideration.
In advanced economies, the mortgage industry makes significant contribution to economic development. But here, it is not the case because mortgage finance as a percentage of Gross Domestic Product (GDP), till date, is still as low as 0.5 percent which is several steps behind other economies including Mexico, Malaysia and South Africa where mortgage contributions to GDP are as high as 10 percent, 25 percent and 29 percent respectively.
Given what the government was able to able to do with mortgage in British economy, it means that mortgage has all the potential to stimulate the economy. But there are obstacles to the growth of the industry which have to be tackled.
The relative ‘newness’ of the sector; lack of understanding of the dynamics and operational models of the sector by many Nigerians, and poor appreciation of the need and the ultimate benefit of keeping money in a mortgage bank are some of the militating factors.
Government can benefit a lot from a flourishing mortgage banking sector as it will help in regulating the … Read More...