The Chief Operating Officer of AG Mortgage Bank, Dr. Simon Ogwu has called for the integration of agricultural income, particularly from oil palm plantations, into the formal banking system as a way of boosting mortgage access and addressing Nigeria’s housing deficit.
Speaking in an interview with ARISE NEWS on Wednesday, Ogwu described agriculture as a traditional and underutilised asset in Nigeria. “There’s something that is traditional to us in Nigeria and in Africa, and that is agriculture,” he said. “Sitting very prominently in the heart of agriculture is oil palm plantation.”
He noted that oil palm grows naturally across most parts of the country. “Virtually 70 percent of the Middle Belt states in Nigeria, this oil palm grows naturally and it’s a major source of income,” he said.
Ogwu lamented the fact that foreign nations had once come to Nigeria, taken palm seeds, and are now selling processed products back into the country. “One of the things that beats our hearts whenever we talk about oil palm plantation is the fact that a nation came to us in this country and picked some of our seeds from Benin, went out there and planted them. And today, those nations are processing them or even bringing the palm oil directly into our country,” he said.
He called for a shift in perception about the sector’s economic potential. “Sometimes people call it passive income. I beg to disagree. It’s a major and active income,” he asserted.
Drawing a connection between agriculture and housing, Ogwu said, “One of the problems we are faced with in Nigeria when I talk to people about mortgage is affordability. A lot of Nigerians can’t afford mortgage repayments because interest rate is a very big factor. It’s a very major challenge.”
He explained that organised oil palm farming through initiatives like AssetRise offers a pathway to sustainable income generation. “What AssetRise is doing is helping Nigerians to grow this agriculture in an organised cluster so that they can have a tap over their income,” he said.
According to Ogwu, this model allows Nigerians to become owners of what he termed “agricultural real estate.”
He said, “From this agricultural real estate, people are having produce that can be commercialised, and commercialised at a quantity that can bring in good source of money.”
He stressed that once the earnings are integrated into the banking system, they can count as part of formal income. “Bring this money into the formal system of banking, we can recognise it as part of the income that can be computed in addition to your salary,” he said.
“That can give you a higher repayment quotient, a higher repayment margin that we can benchmark one third of your total income to enable you to have access to mortgage.”
Ogwu believes that with this, once you can have access to mortgage, then you can have access to housing, adding that agricultural income could be a practical solution to Nigeria’s housing deficit.
He also confirmed that Age Mortgage Bank PLC is collaborating with AssetRise. “We found them credible, we found them worthy, and we found them suitable to manage people’s wealth,” he said.
“We, being a licensed financial institution that provides real estate financing, have decided to put our brand behind what AssetRise is doing currently in the market,” he added.
According to Ogwu, AssetRise projects are located in areas with secured land titles rightly issued by the state governments. He assured potential investors that due diligence has been done to, “ensure that every risk factor is properly taken care of and well mitigated.”
Oyaniyi Boluwatife
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