As the devastation by the coronavirus on the economy continues, experts say, the pandemic may trigger a wave of mortgage defaults in Nigeria, which could affect the housing market.
Currently, mortgage servicers face a potentially catastrophic loss in the wake of coronavirus, because of the economic lockdown and the stay at home directives by governments. Further upstream in the housing market, buyers and sellers are being affected.
While several government agencies in other parts of the world are providing loan forbearance that could delay housing payments for months due to COVID-19, the same cannot be said of Nigeria. Also, financial institutions that invest in bundled mortgage securities are putting in protections, since it would be mortgage servicers and lenders that lose.
In Nigeria, the Central Bank of Nigeria (CBN) recently announced a credit relief of $136.6million to businesses affected by the coronavirus pandemic but industrial watchers believed much still need to be done
Other interventions announced by the bank, include reduction of interest rates for the loan from nine per cent to five per cent retroactively to March 1.
But the umbrella body of Mortgage bankers in Nigeria, the Mortgage Banking Association of Nigeria ( MBAN) want the country to take a cue from other countries to avert further default in mortgages.
MBAN President, Mr. Adeniyi Akinlusi, said COVID-19 cuts across economy and all industries and therefore requires proactive actions.
He commended Nigeria’s Central Bank’s credit relief of $136.6 million to businesses affected by the coronavirus pandemic.
According to him, many people who are taking mortgages are working in different sectors and COVID-19 affect their obligations. “This is the normal thing, we expect that if the people, who are employed lose their jobs, it will affect their obligations since many companies are not able to meet up because of the supply chain in China.
“Several countries have taken actions by asking them to take off one to two months to meet their obligations and the banks are not expected to take them as defaults.”
Akinlusi said since it is not something that is peculiar to Nigeria, “we can learn from what other countries are doing because the shock is global.
In Nigeria, the Central Bank of Nigeria (CBN) recently announced a credit relief of $136.6million to businesses affected by the coronavirus pandemic but industrial watchers believed much still need to be done
Other interventions announced by the bank, include reduction of interest rates for the loan from nine per cent to five per cent retroactively to March 1.
But the umbrella body of Mortgage bankers in Nigeria, the Mortgage Banking Association of Nigeria ( MBAN) want the country to take a cue from other countries to avert further default in mortgages.
MBAN President, Mr. Adeniyi Akinlusi, said COVID-19 cuts across economy and all industries and therefore requires proactive actions.
He commended Nigeria’s Central Bank’s credit relief of $136.6 million to businesses affected by the coronavirus pandemic.
According to him, many people who are taking mortgages are working in different sectors and COVID-19 affect their obligations. “This is the normal thing, we expect that if the people, who are employed lose their jobs, it will affect their obligations since many companies are not able to meet up because of the supply chain in China.
“Several countries have taken actions by asking them to take off one to two months to meet their obligations and the banks are not expected to take them as defaults.”
Akinlusi said since it is not something that is peculiar to Nigeria, “we can learn from what other countries are doing because the shock is global.
The Guardian
