Nigeria has taken a significant step toward expanding access to ethical home financing as the Securities and Exchange Commission (SEC) and the Federal Mortgage Bank of Nigeria (FMBN) unveiled a new Non-Interest Mortgage (NIM) scheme aimed at easing the country’s estimated 28 million housing deficit.
The initiative, introduced during a recent high-level meeting in Abuja, is designed to offer millions of Nigerians – especially those excluded from conventional interest-based mortgages – an affordable and Sharia-compliant pathway to homeownership. For decades, Nigeria’s housing gap has widened due to limited access to affordable, religiously suitable financing options. This joint effort seeks to close that gap and reshape the national mortgage market through ethical capital mobilisation.
SEC Provides Regulatory Backbone to Drive Ethical Housing Finance
Dr. Emomotimi Agama, Director-General of the SEC, described the partnership as a game-changing opportunity to unlock sustainable funding for housing development. He said that the commission is committed to creating the regulatory structure that will support Sukuk issuances and non-interest capital market instruments required to fund the scheme.
“Our collaboration with FMBN is pivotal to unlocking long-term financing for the housing sector,” Agama said. “By establishing clear regulatory guidelines for non-interest mortgage-backed securities, we can attract ethical investors at home and abroad, setting off a productive cycle of financing, construction, and homeownership.”
He stated that a robust non-interest mortgage model would strengthen market confidence, safeguard investors, and support stability across the financial sector.
FMBN Pushes for Inclusive, Affordable Homeownership
Mr. Shehu Osidi, Managing Director/CEO of FMBN, said that the initiative finally addresses a long-standing gap in the National Housing Fund (NHF) scheme, which many Nigerians – especially Muslims – have been unable to access due to its interest-based structure.
“For a long time, many of our citizens have been excluded from the NHF scheme because it is rooted in conventional interest-based mortgages,” Mr. Osidi noted. “This collaboration with SEC provides a path to ethical, inclusive, and financially sustainable homeownership.”
Housing and finance expert, Mr. Ebilate McYoroki, described the move as “long overdue,” predicting it will draw in millions of potential homeowners and investors who have been waiting for an ethical alternative.
“This is a major leap for financial inclusion,” he said. “If transparency is upheld, this could transform housing delivery nationwide.”
How the Non-interest Mortgage Model Works
The new framework is based on ethical financing principles such as risk-sharing, asset-backed transactions, and fair returns. The models being considered include:
- Musharakah (Diminishing Partnership): The bank and buyer jointly acquire a property, with the buyer gradually taking full ownership.
- Ijara (Lease-to-Own): The bank purchases a home and leases it to the customer, with rental payments gradually transferring ownership.
- Murabaha (Cost-Plus Sale): The bank buys the property and sells it to the buyer at a pre-agreed markup payable in installments.
If successfully implemented, the scheme is expected to stimulate construction, create jobs, expand financial inclusion, and support national economic growth.
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