LATEST UPDATES

Finance | Mortgage

Zenith Bank launches $10m mortgage scheme

Oct 30, 2006   •   by   •   Source: Proshare   •   eye-icon 7411 views

October 30, 2006/businessday

 

 

Zenith Bank, in collaboration with USAID, an agency of the United States Government on Friday inaugurated a $10m (N1.3bn) mortgage scheme for the provision of affordable homes to interested Nigerians.


Zenith Bank weekend said prospective applicants for facilities under its mortgage financing programme was expected to have a combined household income of N8-million, or $62, 000, with the spouse. or below.


This is one of the criteria for applicants to benefit from the $10-million, or N1.3-billion mortgage financing partnership between Zenith Bank and the United States Agency for International Development (USAID).


Other factors, according to Jim Ovia, the bank’s managing director, are that the applicants must be economically engaged, and the cost of the house should not exceed N10-million or $77,000 and must be located in Lagos, Abuja, Port Harcourt, or Kano. The mortgage will also be available for three to 12 years.

Ovia disclosed this at the signing of development credit authority agreements between the bank and USAID in Abuja.

Under the agreement, Zenith Bank will use the $10-million to provide loan to low- and middle-income earners with partial guarantee of the United States government on a True-Risk sharing basis encapsulated in the Development Credit Authority (DCA) programme of USAID.

The importance of the partnership includes provision of basic necessity of shelter, measurement of well being, catalyst for economic development, as well as capable of reducing civil unrest.

Ovia, who said the partnership marked a new dawn in mortgage financing in Nigeria, noted that most middle-aged people between 35 and 45 years in the country spent about 70 percent of their yearly income on home construction when trying to acquire their first home.

According to him, mortgage together with housing is about 60 percent of the gross domestic product of the US and about 40 percent in most European countries, while generally in developed economies, real estate construction, infrastructure and housing account for about 50 percent and total mortgage debt outstanding is about 75 percent of GDP.


He stated further that 59 percent of mortgages in the US were funded from the secondary market by portfolio lenders, conduits and government sponsored enterprises, while 62 percent of mortgages were funded directly in the primary markets by banks, insurance companies and specialized funds in the U.K.

John Campbell, US ambassador to Nigeria, said the agreement with Zenith was one of the initiatives of the newly created public private partnership office in USAID to foster cooperation between the agency and Nigerian partners to mobilize resources, expertise, creative approaches and technologies to address development challenges.

He stressed the importance of the partnership because \"home ownership creates wealth and employment and as well complements Nigerian government’s efforts and the US presidential housing initiative at providing affordable housing\".

Get the App

apple-store  play-store

Connect with us


Proshare is a professional practice focused on delivering research and information services to bridge the gap between investors and markets; by delivery on credible, reliable, and timely engagements through the following areas — Impact Research, Market Intelligence, Strategic Advisory, Stakeholder Relations & Digital Media.