Nigerian banks are intensifying efforts to woo citizens living abroad through the Ministry of Finance Incorporated Real Estate Investment Fund (MREIF), a new government-backed initiative designed to make home ownership more accessible.
The MREIF, introduced by the Ministry of Finance Incorporated (MOFI), the federal government’s investment arm, is aimed at addressing long-standing challenges in the housing sector.
Among the financial institutions embracing this initiative is Stanbic IBTC Bank.
The bank has begun targeting diaspora Nigerians with a home loan package tied to the MREIF.
According to Stanbic, eligibility for the loan is based on a minimum monthly salary of ₦500,000 or its foreign currency equivalent for those living abroad. For self-employed individuals, an annual turnover of at least ₦100 million is required.
In a fact sheet shared by real estate vendor Agent Jake via his X (formerly Twitter) handle, Stanbic outlined key features of the offer:
“All existing parameters to apply to include stop-gap facility option, where required, while awaiting the MREIF disbursement,” the fact sheet says, adding that while the currency for this transaction is the Naira, the minimum property value to be applied for is N12.5 million.
The document further stated that borrowers can access loan amounts starting from as little as ₦10,000 up to a maximum of ₦100 million. Any surplus needed above the bank’s ceiling can still be financed by the applicant.
It added that the 20 percent equity contribution could come from 25 percent of the loan applicant’s retirement savings account from his Pension Fund Administrator (PFA).
“Life and Property Insurance cover is mandatory; the maximum loan tenor is 20 years for employees and seven years for the self-employed. For employees, the loan must mature when they are 60 years old or on their official retirement age,” the fact sheet says.
It revealed that the loan attracts facility fees, including 1 percent management fee and another 1 percent advisory fee, adding that a joint application is allowed with a spouse only.
Agent Jake, who posted the details online, praised the initiative and encouraged diaspora Nigerians to explore the offer.
However, the suggestion sparked a flurry of mixed reactions on social media.
“That’s the best deal I’ve ever seen, interest rates are closely related to inflation rates, our inflation rate in Nigeria today is over 28 percent, an interest rate of 12 is a very sweet deal that everyone capable should rush,” Jake noted.
While some commentators saw the loan scheme as an opportunity, others raised concerns about its cost and terms, pointing to the relatively high interest rate and shorter repayment period.
According to @cosmos_lee, “This is a very good one to be honest (tbh), but if my maths is ‘mathing,’ say I borrow 50 million at 12 percent per annum, I would be paying back over 135million in interest for a 30-year period?”
In his own reaction, @compoundingnaira notes that 12 percent for loan additional 2 percent for fees, gives 14 percent total for the loan, pointing out that any serious diaspora in North America should be able to get a 6-8percent loan and with Europe at a cheaper rate, he doesn’t see this being a hit with the diaspora.
Another Diasporan, @JayKezie, counters @compoundingnair, saying that no bank in North America will give an immigrant a mortgage to buy a property in Nigeria, adding that interest rates are relative to the inflation rate. “North American banks can offer even 4 percent interest rate because the inflation rate is sub-2 percent while Nigeria’s inflation rate is 33 percent. So, 12 percent loan is cheap,” he said.
“Canada’s inflation rate is 1.9 percent, up from 1.7 percent previously. Bank of Canada interest rate is currently at 2.75 percent. A simple google search will help,” he added.
@Kadupee said “Someone should please make me understand why borrowing is so expensive in Nigeria and most African countries. 12 percent on a 20 percent down payment, when you have USA at 6-7 percent. CBN needs to do better.”
