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  According to experts, there are growing opportunities in unlocking the potential of Nigeria’s mortgage sector valued at over N6.4 trillion but lack of awareness, accessibility, security, lack of infrastructure and government policy are dampening demand. The mortgage sector in Africa’s biggest economy, according to them, is grappling with the high cost of construction, surging land prices and excessive financing costs.
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“There are more than enough market opportunities for mortgage products through affordable mortgage schemes, but lack of awareness and struggling infrastructure are major challenges,”
said Olufemi Seyi, chief operating officer at Casafina Capital Limited, an investment company exposed to Nigeria’s real estate sector.
“The Nigerian mortgage sector is large enough to drive Nigeria’s capital market but there is little or no accessible information about mortgage products which is a major challenge in attracting millennials,”
he added. The Nigerian mortgage sector has long been in a state of crisis, with low rates of homeownership and high default rates leading to inefficiencies and high costs for lenders and borrowers alike. However, FinTechs have the potential to help solve many of these issues and bring much-needed innovation to the sector. Here are some of the ways FinTechs can help resolve the crisis in the Nigerian mortgage sector:
  • Increased accessibility and affordability

FinTechs can use digital platforms to increase the accessibility of mortgage products to a wider range of borrowers, particularly those who may have been excluded from the traditional banking sector. This can help to increase the number of homeowners in Nigeria, which has been a persistent challenge. Additionally, FinTechs can offer more affordable products, as they can operate with lower overhead costs than traditional banks and other lenders.
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  • Improved underwriting processes

FinTechs can use advanced data analytics and machine learning algorithms to analyze the creditworthiness of potential borrowers more efficiently and accurately. This can help to reduce the risk of default and ensure that only borrowers who can afford a mortgage are approved. Additionally, FinTechs can use digital platforms to streamline the underwriting process, making it easier for borrowers to apply for a mortgage and for lenders to evaluate applications.
  • Increased transparency

FinTechs can use digital platforms to increase the transparency of the mortgage process, making it easier for borrowers to understand the terms and conditions of their loans. This can help to reduce the number of defaults and improve the overall health of the mortgage market.
  • Alternative funding sources

FinTechs can also provide alternative funding sources for mortgage lenders, such as crowdfunding and peer-to-peer lending. This can help to increase the availability of funding for mortgage loans and reduce the risk of default.
  • Better customer experience

FinTechs can use digital platforms to offer a better customer experience for borrowers, such as faster application and approval processes, more accessible customer service, and the ability to manage their loans online. This can help to increase customer satisfaction and reduce the number of defaults.
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While the challenges facing the Nigerian mortgage sector are significant, FinTechs have the potential to bring much-needed innovation and help resolve many of the key issues. By using digital platforms and advanced technologies, FinTechs can increase accessibility and affordability, improve underwriting processes, increase transparency, provide alternative funding sources, and offer a better customer experience. Ultimately, this can help to bring stability to this sector and promote economic growth in Nigeria. Featured Image Source: Nigeria Real Estate Hub
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This article was first published on 9th February 2023


Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.

Comments (4)

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