NMRC’s capital raise put on hold as shareholders seek clarifications

The quest by the Nigerian Mortgage Refinance Company (NMRC) to raise more capital from the balance of its 8.5 billion share capital could not get approval at its annual general meeting (AGM) in Lagos Monday, as the shareholders of the company insisted on getting more clarifications on the purpose of the capital raise.

Housing estate in Nigeria

The company, a secondary mortgage institution midwifed by the Federal Government but private sector-led, gathered its shareholders in Lagos, seeking their approval to, among other things, increase their capital base for three main reasons – capital adequacy, mortgage refinancing and procurement of necessary infrastructure.
The shareholders, who saw the need for capital adequacy for the company, especially for its mortgage refinancing function, could not, however, come to terms with the management’s explanation on the issue of infrastructure and therefore insisted that the capital raise be put on hold until the management was able to spell out those items of infrastructure that made the capital raise necessary.
After an extensive explanation without “speaking to the hearts of the shareholders,” Charles Inyangette, managing director/CEO of the company, agreed to their demand that that aspect of the day’s business be rested and revisited another day.
The CEO said an extra-ordinary general meeting (EGM) would be convened at a later date for the management to provide more insights into the issue of infrastructure, saying that central to the need for the capital raise was also to protect shareholders investment and grow the company.
NMRC, planned to provide liquidity in the country’s mortgage system, was launched in January 2013 by the Goodluck Jonathan administration and, like other finance institutions in the country, it is regulated and supervised by the Central Bank of Nigeria (CBN).
Femi Johnson, a non-executive director in the company and the president of Mortgage Banking Association of Nigeria (MBAN), said that the company would refinance mortgages that would be originated by primary mortgage lenders including Primary Mortgage Banks (PMBs) and commercial banks that were into mortgage businesses.
At the launch of the company, Ngozi Okonjo-Iweala, former minister of finance, said the NMRC was expected to pull down lending rates for housing to the low double digits or a high single digit, saying, “this company is being set up to help lower the funding cost of mortgages and promote the affordability and availability of good housing for working Nigerians by providing mortgage lending banks increased access to liquidity and longer term funds in the market.”
Inyangette, however, said in an interview in Lagos that the interest rate on loans from the company would be market-driven; assuring that the company was much closer than it was at inception in terms of delivering on its mandate.
“We have fully taken off, we are issuing bonds and, as we speak, we are refinancing mortgages,” he said.

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