Nigeria's mortgage market still very small, says Credit Direct Report

Nigeria's mortgage market is one of the least developed in Africa. Outstanding mortgage loans make up less than 1% of the country's Gross Domestic Product (GDP). This is according to Credit Direct's 2025 Nigeria Credit Landscape Report. The report shows that formal housing finance plays a limited role in a country where many people cannot afford homes.

The report states that outstanding mortgage assets are still below ₦1 trillion. In contrast, mortgage lending is over 16% of GDP in South Africa and about 2% in Kenya. This shows a big gap in housing finance across Africa. Nigeria's mortgage market is not big enough to meet the growing demand for housing.

The report highlights that Nigeria's weak mortgage market is due to various structural challenges. These include high borrowing costs, limited access to long-term funding, low household incomes, and complicated land administration processes. There is also a lack of proper property title documentation. Together, these problems make it hard for many Nigerians to access formal mortgage financing, even as the need for affordable housing rises.

Since traditional mortgages are out of reach for most families, many Nigerians fund home ownership through personal savings or cooperative societies. Some even build their homes in stages as they gather funds. While this method helps families eventually own homes, it often delays construction and makes it difficult to get the long-term financing needed for larger housing projects.

The report suggests that solving these problems will need coordinated reforms in the housing finance system. It recommends improving access to long-term funding for mortgage institutions. It also calls for better land registration and title systems, along with financing models that fit the income realities of Nigerian families.

Credit Direct points out that improving the mortgage market can lead to benefits beyond just increasing home ownership. A stronger housing finance market could boost construction, manufacturing, financial services, and other areas linked to real estate. This growth could create more jobs and support the overall economy.

You can download the full Nigeria Credit Landscape Report 2025 from Credit Direct at this link: https://www.creditdirect.ng/2025-credit-report