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Accessing funds go beyond applying to the bank – Adeniyi Akinlusi

Mr. Adeniyi Akinlusi has over 20 years of extensive experience in leadership positions in banking, strategic leadership, corporate turnaround, and transformation. He is currently the Managing Director/Chief Executive Officer of TrustBond Mortgage Bank Plc. (formerly Intercontinental Homes Savings & Loans Plc.)
Read his interview with Nigeria real estate hub below

NREH: How can developers access funds through mortgage?

Mr. Adeniyi Akinlusi: Accessing funds from project go beyond applying to the bank in mortgage or the commercial bank. What is important for the bank is an exit. How you exit or repay is more essential than giving you the money. The money the bank is giving to you represents depositor’s funds from other Nigerians and they must be ready to pay back to them.

Also, a lot of decision making needs to be put in place. When you talk about ability to repay, off-takers come to mind. Are you just building? is it high risk? are you building for a particular market? or you are just building and hoping to sell?.

A lot of people have built and are hoping to sell in Banana Island, Lekki, Asokoro and everywhere in Abuja. Just be sure you are not building and hoping to sell. You need to have a defined market. There is a difference between having a list of off-takers who have expressed interest and having off-takers who have shown commitment. You need serious off-takers. Apart from commitment in form of down payment, there is also equity. You also need to know if the off-takers will pay completely from their cash resources. If there is a bank waiting to provide mortgages, you also need to know if the people are prequalified for a mortgage. If the bank gives them mortgage, will they have the resources to pay over 15 years consistently?
Not someone who is just starting a business and is still trying to stabilize the business or someone who just finished service and on his first job. He is still going to change jobs in-between and probably be unemployed at some point. The bank is looking through a pipe and must be able to see their way through. If they give you the money, how can they get it back?
The money you are being given is not from the money of the bank but depositor’s funds.

NREH: What happens when off-takers are also are unable to access the mortgage?

Mr. Adeniyi Akinlusi: As long as you are building demand-led development, not supply-led e.g affordable housing, you will sell. It is better than buying land in Asokoro and hoping one politician will help you to sell it. You just need to be sure the off-takers have been prequalified for that.

NREH: Are there new funding mechanisms available to developers?

Mr. Adeniyi Akinlusi: There are crowdfunding but people are calling for regulation so they won’t lose their money. MMM networking and the rest is crowdfunding.
If it is credible, there are ways to raise funds. There is what we call private equity companies who have raised funds from other investors and they are specialized. If you have a good bankable project, they can put in money for a long term.

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