Nigeria’s longstanding housing crisis may be edging toward a historic shift as the Securities and Exchange Commission (SEC) and the Federal Mortgage Bank of Nigeria (FMBN) unveiled a collaborative plan to launch a comprehensive Non-Interest Mortgage (NIM) scheme aimed at expanding homeownership access for millions of citizens. The initiative, formally announced at a high-level meeting in Abuja, seeks to deliver an alternative mortgage framework rooted in ethical, Sharia-compliant financing models—an option many Nigerians have long awaited.
The move comes at a critical time. Nigeria’s housing deficit, estimated at more than 28 million units, is one of the largest in the world and continues to widen due to population growth, urban migration, limited construction financing, and the absence of affordable long-term mortgage products. Compounding the challenge is the fact that millions of Nigerians—particularly in the northern states—have been unable to participate in conventional mortgage schemes because they are interest-based, a structure that violates Islamic financial principles.
With this new partnership, the SEC and FMBN aim to dismantle one of the most persistent barriers to inclusive homeownership by designing mortgage products aligned with non-interest financing principles widely used in Islamic finance markets across the Middle East, Southeast Asia, and parts of Africa.
SEC to Chart Regulatory Path for Sukuk and Non-Interest Mortgage Securities
At the announcement event, SEC Director-General Dr. Emomotimi Agama emphasized that the collaboration is not merely administrative but foundational to building a sustainable and scalable housing finance ecosystem. According to him, the Commission will take the lead on creating regulatory guidelines for Sukuk issuances, non-interest mortgage-backed securities, and other asset-linked instruments that can attract long-term investors.
Agama stressed that unlocking continuous funding for housing requires a robust, transparent capital market structure that can mobilize ethical investment from both domestic and international markets. “By laying out a clear and credible regulatory pathway for non-interest mortgage instruments, we can draw in a wide pool of ethical investors. This will, in turn, fuel a cycle of construction, financing, and homeownership that benefits the entire economy,” he said.
He added that a properly structured NIM model would bolster market integrity, safeguard investors, and reinforce financial system stability.
FMBN Focuses on Inclusion and Affordable Ownership
On his part, FMBN Managing Director and CEO Shehu Osidi described the partnership as a strategic response to the limitations of the existing National Housing Fund (NHF). For decades, the NHF’s reliance on interest-based lending has excluded millions of Nigerians who, due to religious beliefs, could not participate.
Osidi noted that the new scheme aims to deliver non-interest mortgage products that are accessible, equitable, and financially viable. He emphasized that the FMBN has already conducted extensive consultations with Islamic finance experts to ensure the products meet global standards while addressing local realities.
“We are committed to creating mortgage solutions that meet the socio-religious needs of our citizens while expanding opportunities for homeownership. This collaboration offers a pathway for millions who have never had access to mortgage financing,” he said.
Industry Experts Applaud the Initiative
Housing finance specialist Ebilate McYoroki praised the initiative as “long overdue,” arguing that non-interest mortgage options could unleash pent-up demand among potential homeowners who have historically remained outside the formal housing finance system. He also noted that the strategy could attract diaspora investors seeking Sharia-compliant real estate opportunities.
How the Non-Interest Mortgage Model Works
The NIM framework will rely on globally recognized Islamic finance structures, each eliminating interest but ensuring profit is earned transparently and through shared risk or asset-backed transactions:
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Musharakah (Diminishing Partnership): The bank and customer co-own the property, with the customer gradually purchasing the bank’s stake until full ownership is achieved.
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Ijara (Lease-to-Own): The bank acquires the home, leases it to the customer, and transfers ownership progressively as the customer makes rental payments.
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Murabaha (Cost-Plus Sale): The bank buys the property and sells it to the customer at a pre-agreed markup payable in installments.
These models ensure transparency, ethical returns, and asset-based financing—making them suitable for citizens seeking non-interest alternatives.
Potential for National Impact
If implemented effectively, the SEC-FMBN initiative could stimulate housing construction, create thousands of jobs, deepen financial inclusion, and contribute to closing Nigeria’s vast housing deficit. It also positions the country to attract substantial non-interest capital, including from international Islamic finance markets valued at over $3 trillion globally.
With both institutions committed to building a coherent regulatory and operational framework, the long-awaited expansion of ethical housing finance in Nigeria may finally be within reach.
