(Ecofin Agency) - Nigerian Mortgage banks are struggling to survive as job losses and high inflation has hindered customers’ ability to pay their debts.

“Over the last year-and-a-half, the recession affected key sectors such as oil and gas, financial and manufacturing. There were a lot of layoffs,” said Udo Okonjo (photo), chief executive officer of Lagos-based real estate broker Fine & Country West Africa.

Indeed Nigeria in 2016 entered its first recession in 25 years. The number of unemployed reached the highest level to 11.19 million at the end of September 2016, while inflation increased to 18.72% in January but later dropped to 17.78% in February. The country’s biggest mortgage lenders in October 2016, reported that their net income in Q3 dropped by 37% as non-performing loans increased.

However state-owned Federal Mortgage Bank is providing mortgage providers with loans of about 20years. It aims to relieve operators of the burden of seeking long-term funding, Adeniyi Akinlusi, president of the Mortgage Banking Association of Nigeria said.

He stated that the CBN is expected to also draft rules this year that will allow mortgage companies to provide loans to workers in the informal sectors, including farmers, who earn less.

Anita Fatunji