A financial expert and economist, Kola Ayey, of Growth and Development Limited (GDL) HouseMoni, in Lagos, has said economists have divided the economic units of any economy into three – individuals/households, businesses and government, adding that all the funds in a system belong to these three economic units, hence the reason, financial institutions should create instruments that allow each category to have sufficient access to fund relative to what they contribute.
From these three categories, Ayeye averred that he notices that individuals/households that are the biggest of the three, are disadvantaged relative to the other units. Explaining further, he said, “Businesses, particularly big businesses, are successful and they can take care of themselves. Government is government. I mean, they can confiscate their money just by making laws. But with individuals and households, you will find out that financial institutions do not create instruments that allow them to access what they want, and even when they do have access to funds, the interest rate is way above what they can afford.”
Citing an example, Ayeye, who is also the executive vice chairman GDL, said, “looking at the impact of low interest rates, if an individual is looking at buying an asset or a home and can pay N100,000 monthly for the next 15 years, that is a 9.9 percent interest rate environment. That person can buy an asset or a home that is worth N9.3 million, because at 9.9 percent, over 15 years, N100,000 will pay out both the principal and the interest. However, if the interest rate is 25 per cent, for the same amount of money, that person can buy an asset or a house that is worth N1.6 million, which is not possible in this present Nigerian economy.
That is why keeping interest rates low is crucial to deploying capital for shared prosperity.
“That is what GDL, a diversified financial services group, wants to achieve. We want to revolutionise home ownership financing in Nigeria with the launch of HouseMoni, a groundbreaking rent-to-own home ownership scheme. The scheme is designed to address the near-total absence of appropriate financing for homeownership in Nigeria. It offers a financially sustainable path to owning a home. With a goal of financing up to 1.5 million new homeowners over 15 years, HouseMoni aims to make homeownership a reality for a wider segment of the population.”
Speaking on the key Features of HouseMoni, Ayeye said they include Fixed Single-Digit Interest Rate, where HouseMoni offers a competitive, low interest rate of 9.9 percent fixed for the entire 15-year term, ensuring financial stability and predictability; Home Finance, in that, the scheme provides up to 3x the contribution of HouseMoni Account Holders in home finance options that empower subscribers transition from renting to owning their homes; Tenor as HouseMoni has a payment plan of 15 years comprising 3 ½ years of savings after which financing is provided by GDL. The financing is repayable over a maximum of 11 ½ years thus aggregating a 15-year payment plan.
Other key features are the flexible repayment options, where subscribers can utilise their regular income, Retirement Savings Accounts (RSAs), windfall income, or even rent payments to contribute towards ownership.
He averred that HouseMoni is specifically designed for Nigerians aged 25 and above with a steady source of income, adding that the scheme offers two variants: HouseMoni classic, designed for individuals looking to purchase their own homes and HouseMoni community, designed for groups of people who want to build an estate together.
“At GDL, we firmly believe that the Yoruba proverb ‘Agbajo owo la fin soya ‘— It is by combining money/resources that we achieve success — holds true for our society and economy. To foster growth and prosperity, we must ensure that capital is equitably distributed among all contributors. HouseMoni represents GDL’s commitment to creating a financial system that works for everyone. Our audacious goal is to help 1.5 million people become new homeowners within 10 years. By empowering individuals and families to achieve homeownership, we’re not just building houses; we’re building stronger communities and a more vibrant economy. Your growth is our goal,” Ayeye affirmed.