Categories: Business

Access to 25% RSA by workers for mortgage will boost housing sector, economy —Experts

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Stakeholders in the housing sector, comprising the President,Nigerian Institute of Quantity Surveyors (NIQS), Mr Olayemi Shonubi; former Chairman, Nigerian Institution of Estate Surveyors and Valuers, Lagos Branch, Mr Stephen Jagun; Executive Director, Housing Advocate Network of Nigeria (HDAN), Mr Festus Adebayo and Executive Secretary/Chief Executive Officer of Mortgage Banking Association of Nigeria(MBAN), Kayode Omotosho;, have lauded the decision of the National Pension Commission to allow workers use 25 per cent of their Retirement Savings Accounts as mortgage.

The new initiative, they said would help to boost the mortgage and housing sectors of the economy.

Speaking with Nigerian Tribune, NIQS President, Mr Olayemi Shonubi, said the initiative will give a room for people working in organised institutions to own their home before retirement.

Apart from this, he said it would help to bridge the housing deficit in the country and help to expand the mortgage sector.

Sonubi also added that the implementation of the idea, would reduce corruption among civil servants, explaining that most of them steal government’s money due to the fear of where they will live after retirement.

“But now they know they can access part of their retirement saving for mortgage to own a home, the desperation to steal government’s money will reduce,” he said.

He commended PenCom management and other stakeholders for the new policy

Former Chairman, NIESV, Lagos branch, Mr Stephen Jagun, described the new initiative as a welcome development.

According to him, with the way pension fund is being administered in Nigeria, contributors are already losing fate in the system.

However, with the new policy, he said that people will see a window of opportunity for their fund’s utilisation.

“Some look at it more like if they have a choice they will not participate. While some want to avoid it. I know people who don’t even bother about the funds because of the huddles involved in accessing the fund.

“With this now, people will see a window of opportunity for their fund utilisation,” he said.

Jagun added that it could also indirectly make more funds available for the real estate market, hoping that the implementers will not frustrate the idea.

He pointed out that the new policy will make less funds available in the scheme for the government to borrow from.

“The more they see that there’s so much money there, the more they may be tempted to look in that direction for fund. I see it as a gradually opening of the funds for schemes that could help the economy and the contributors.

“As it were, contributors will be happy that they can benefit from their sweet in their life time. Because many had died not reaping the fruit of the scheme.”

Shonubi and Jagun’s comments followed a statement by PenCom last Friday, that it has approved the issuance and immediate implementation of the guidelines on accessing RSA balance towards payment of equity contribution for residential mortgage by RSA holders.

The statement read: “PenCom is pleased to inform all stakeholders and the general public, particularly RSA holders, that the commission has approved the issuance and immediate implementation of the guidelines on accessing RSA balance towards payment of equity contribution for residential mortgage by RSA holders.

“The approval is in line with Section 89 (2) of the Pension Reform Act 2014, which allows RSA holders to use a portion of their RSA balance towards payment of equity for residential mortgage.”

Also expressing delight over the new idea, Mr Festus Adebayo described the new policy as a product of collective advocacy, adding that the success should be considered as a call to duty, adding that more needed to be done in the housing and mortgage sub sector.

He commended the giant stride, saying “It is a product of collaborative advocacy,” urging stakeholders in the housing / mortgage sub sector to do more.

Also, Mr Kayode Omotosho, in HDAN’s social platform gave an insight as to how this policy was birthed.

He said, “It commenced silently as an advocacy issue with PenCom that originated from MBAN; which thereafter was escalated to full advocacy issue by stakeholders on the platform of the Former Nigerian Housing Finance Program (NHFP).

“However, all the continuous efforts were in the last few months finally coordinated with PenCom by FSS2020 and MBAN which culminated into the broad guidelines issued by PenCom on the idea.”

While congratulating Nigerians in general and those who have particularly worked to ensure the new policy sees the light of day, Omotosho noted that there is still more to be done to ensure smooth implementation.

He said: “its breadth and depth would only be fully achieved with the setting up and take-off by the Nigeria Mortgage Guarantee Company (NMGC), a Credit Enhancement Initiative that is currently being finalised by FSS2020, NMRC, MBAN/mortgage banks for Nigerians to take the fullest advantage of the Four-some Mortgage Banking sub-Sector institutions of NMRC, NMGC, MWFL, 25 percent RSA contribution for mortgage equity.

Also, MrAdedejiAdesemoye, a retired Deputy Director at the Central Bank of Nigeria (CBN), said the new policy was very commendable.

He also praised the various provisions of the policy which would make it easier for couples and even those whose 25 per cent RSA is not sufficient for down payment for mortgage.

He said, “It’s a very commendable policy and joint equity contributions of husband and wife for mortgages is now also available. There is also supplementary opportunity through voluntary contributions for those whose 25per cent RSA is not sufficient for equity down payment for mortgage.”

He however warned Nigerians not to abuse the privileges and that serious guidelines should be put in place to ensure smooth implementation.

His words, “The policy should not be abuse however as 25per cent is significant in pension benefits, therefore the implementation should be guided by strong underwriting requirements as provided in the Uniform Understanding Standards ( UUS) developed for the industry.”

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