Nigeria is preparing to introduce its first nationwide interest-free mortgage system following a new partnership between the Securities and Exchange Commission (SEC) and the Federal Mortgage Bank of Nigeria (FMBN).

The initiative aims to reduce the country’s housing deficit—currently estimated at 28 million units—by creating home-financing options aligned with ethical and non-interest financial principles.

The agreement was announced after a high-level strategy meeting in Abuja, where both institutions outlined plans for a Non-Interest Mortgage (NIM) framework designed to expand access to affordable housing. If fully implemented, the scheme will offer an alternative for millions of Nigerians who cannot access conventional, interest-based mortgage products.

SEC to Provide Regulatory Backbone

SEC Director-General, Dr. Emomotimi Agama, said the Commission will support the programme by strengthening regulations for Sukuk and other non-interest financial instruments that will fund the mortgage ecosystem.

He explained that a clear regulatory foundation is necessary to attract long-term capital from domestic and foreign ethical investors.

“Our work with FMBN marks a major step toward unlocking sustainable funding for housing. With strong structures for non-interest mortgage-backed instruments, we can build a cycle of financing, construction and homeownership,” Agama said.

FMBN Targets Financial Inclusion

FMBN Managing Director, Mr. Shehu Osidi, said the model is designed to serve Nigerians excluded from the National Housing Fund because it is interest-based.

“For decades, many Nigerians—particularly those who follow Islamic finance principles—have been unable to benefit from mortgage programmes. This partnership is a deliberate effort to close that gap,” he said.

Housing finance expert Ebilate McYoroki described the initiative as “long overdue,” saying it could spur housing demand and unlock new investment flows.

How the Interest-Free Mortgage Will Work

The proposed Non-Interest Mortgage system will rely on Islamic finance structures such as:

• Musharakah (Diminishing Partnership): Joint ownership between the bank and homeowner, with gradual buyout.

• Ijara (Lease-to-Own): Bank purchases property and leases it until ownership transfers.

• Murabaha (Cost-Plus Sale): Bank buys the property and resells at an agreed markup payable in instalments.

Expected Economic Impact

Officials say the new mortgage structure will create jobs, stimulate construction, and deepen financial inclusion nationwide. It also aligns with the Federal Government’s broader plan to reform housing delivery and expand homeownership opportunities.

The post Nigeria Sets to Launch Interest-Free Mortgage Scheme Under New SEC–FMBN Deal appeared first on Housing TV Africa.

The Financial Reporting Council of Nigeria (FRC) has announced plans to integrate Islamic finance services into the country’s national financial reporting framework.

The move involves adopting standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the Council said.

Rabiu Olowo, Executive Secretary and CEO of the FRC, revealed the initiative during the 7th Africa Islamic Finance Conference in Lagos, noting that it aligns with the Council’s mandate to set, monitor, and enforce financial reporting standards across Nigeria.

Olowo highlighted the rapid growth of Islamic finance in Nigeria, including expansion in Islamic banking, Sukuk issuances, Takaful insurance, and non-interest capital market products.

He stressed that the adoption of AAOIFI standards would ensure consistency, reliability, and global comparability in financial reporting for the sector.

“This sector has become a dynamic contributor to financial inclusion, infrastructure financing, and ethical investment alternatives. Integrating AAOIFI standards is both a regulatory necessity and a strategic step toward building trust and transparency in our financial system,” Olowo said.

Vice President Kashim Shettima, represented by the President’s Special Adviser on Economic Affairs, Tope Fasua, welcomed the move, emphasizing that Islamic finance is grounded in ethics, fairness, and shared prosperity.

Speaking at the conference, Muhammadu Sanusi II, 14th Emir of Kano and former Central Bank governor, praised the sector’s growth.

“Islamic financing primarily invests in real assets like roads, power plants, water systems, and digital networks. When applied effectively, it can significantly boost economic development,” Sanusi stated.

He further noted that Islamic finance is particularly suited for infrastructure projects, creating jobs and long-term value while promoting economic stability.

The FRC’s adoption of AAOIFI standards complements existing IFRS practices, providing a dedicated framework for the unique contracts and instruments used in Islamic finance. Officials say the move will strengthen transparency, support financial inclusion, and ensure that Nigeria’s Islamic finance sector continues to play a meaningful role in economic growth.

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