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  Banks are a big part of the real estate ecosystem in Nigeria. They are key financiers in the industry, providing capital for many developments. However, with the increase in interest rates in recent times, companies in this domain are finding traditional lenders too expensive. As a result, they are seeking non-bank funding for real estate projects.
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If you are involved in Nigeria’s property markets, you too may be hunting for alternative sources of finance. Unless they exist, developers of various sizes will likely struggle. Fortunately, there are indeed options to choose from besides the banks. This article talks about 6 of them.

Private Equity (PE) Firms

These investors provide capital for real estate projects in exchange for an ownership stake in the business whose project they’re funding. Or, at least, they may demand a share of the profits from the project. But besides supplying substantial amounts of money, they also bring a great deal of expertise to the table. They often have a deep knowledge of the sectors they invest in and will offer insights and suggestions that could improve outcomes for the project.

Venture Capital

You might have assumed that Venture Capital firms are solely interested in investing in tech startups. But this isn’t necessarily the case. Some are open to funding real estate projects that are driven by some sort of tech or innovative business model. If your concern is with smart cities or urban innovation, you could pitch to VCs for financial support. Just make sure the deal is high growth and can deliver outsized returns. That’s what VCs are typically after.

Crowdfunding

Some digital investment platforms are open to opportunities in real estate. Some are willing to list projects from the sector on their apps or websites, where their registered users can collectively invest in such opportunities. In return, they (along with their users) will get a share of the profits from those projects as returns on their investment. This is an avenue you can explore if you’d like to tap into Nigeria’s pool of “idle” cash.
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Institutional Investors

Banks are not the only institutional source of funding for real estate concerns. Insurance companies, pension funds, and asset management firms are options in this category that you can explore. Pension Fund Administrators (PFAs), for example, have shown a fair bit of interest in real estate over time. Some of their investment in the industry is via Real Estate Investment Trusts (REITs) but they also have more direct involvement in development projects.

Government Grants and Subsidies

At times, the government comes up with initiatives to help reduce Nigeria’s huge housing deficit. These initiatives typically incorporate (among other things) subsidies or single-digit interest funding for low-income real estate developments. Housing development initiatives managed by the Federal Mortgage Bank of Nigeria (FMBN) and similar government-allied institutions are probably worth considering.

Family and Friends

Your contacts may be able to help with funding for your project. Or, perhaps, they could link you up with people who might be in a position to support you this way. An advantage of this funding source is that it’s more flexible than formal alternatives. You are likely to receive funding quicker, and with less complicated terms, because the financiers know you. However, there’s a risk that this will strain your relationship with them if the project does not succeed. So, be clear about the terms of investment before going ahead with deals of this nature, and have your agreements documented.
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Final Words

If you are a real estate developer in Nigeria, you will want to know what non-bank funding for real estate projects exists in this country. Our article has presented you with 6 of them. It’s up to you to investigate each of these options and go for one that fits your goals and unique business conditions.
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This article was first published on 18th March 2025
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ikenna-nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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