Nigeria’s apex housing finance establishment, the Federal Mortgage Bank of Nigeria FMBN has launched its first Non-interest product in Kano referred to as Ijarah Muntahia Bittamleek also called Lease-to-Own.
According to the financial institution, the traditional interest-based mortgage mannequin doesn’t align with the private convictions of some Nigerians arising from affordability, restricted entry, prompting the financial institution to mobilise contributions into the National Housing Fund (NHF) and facilitate entry to inexpensive housing.
This is to assist folks entry monetary companies which can be according to their values and convictions.
Speaking on the Launch, FMBN Managing Director/Chief Executive Officer Shehu Usman mentioned the target is to widen the mortgage market and supply an extra pathway to homeownership such that eligible NHF contributors are usually not excluded from housing finance.
“The product Ijarah Muntahia Bittamleek, is based on Islamic finance arrangement commonly described as Lease-to-Own. Under this structure, the customer occupies a property through a lease arrangement and subject to the agreed terms and fulfilment of the contractual obligations, ownership is transferred to the customer at the end of the arrangement,” mentioned the CEO.
He mentioned the product isn’t for one non secular group however an extra housing finance choice for eligible NHF contributors who want to entry a non-interest based mostly association.
According to him, whereas the worldwide Islamic finance property have reached US$5.98 Trillion in 2024, Nigeria’s Islamic finance business was estimated at over N4.4 trillion in 2024 from N2.5 trillion in 2023 and it’s projected to rise.
The financial institution mentioned it has devoted a housing undertaking financed by FMBN in Bichi because the pilot implementation of the Non-interest mortgage product.
Launching the product, Minister of Housing and Urban Development Engineer Muntaqa Rabe Darma mentioned the product launch is according to the National Mortgage Industry Policy issued by the Ministry in July this yr, directing FMBN to disburse at the least 40% of every yr’s NHF assortment as mortgages and lift its loans ceiling from N50m to N80 million.
He additionally requested the financial institution to determine utility inside 30 working days, noting that the product will slim the housing deficit in the nation.
Darma mentioned greater than six million Nigerians contribute to the NHF but fewer than 500 particular person mortgages are booked in a yr with many contributors staying away from the interest-bearing loans altogether.
With the launch of the product the Minister mentioned the Bank is anticipated to course of 2000 mortgages this yr and 5000 by the yr 2028.
He charged the financial institution to scale up from Kano to succeed in Lagos, Port Harcourt, Enugu,Ibadan, Sokoto and Maiduguri, saying President Bola Tinubu locations housing on the coronary heart of inclusive progress and his Renewed Hope Agenda.
Kano State Governor Abba Kabir Yusuf represented the Commissioner for Housing and Urban Development, Arch. Ibrahim Yakubu Adamu hailed the introduction of the product which he mentioned will assist broaden entry to housing finance.
He mentioned an enormous expanse of land in Lambu village was allotted and is being developed as a Renewed Hope City undertaking.
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