Stakeholders push insurance, pension funds to solve housing crisis

Stakeholders have canvassed leveraging insurance and pension schemes to bridge the existing housing gap.

According to the Housing Development Advocacy Network, by integrating insurance policies and pension funds into housing finance, Nigerians can access long-term, low-interest mortgage plans and better housing opportunities.

The group noted, “Insurance can provide security for homeowners against risks such as property loss or damage, while pension schemes offer a sustainable pool of funds for mortgage financing. Experts argue that aligning these two sectors with housing policies could make homeownership more attainable for the average Nigerian.

“Stakeholders have called on the government and private sector to collaborate in creating policies that enable the use of pension contributions as collateral for housing loans. Similarly, incentivising insurance providers to offer affordable housing-related policies can further strengthen the framework.

“By prioritising reforms in the insurance and pension industries, Nigeria could take a significant step towards reducing homelessness and providing affordable housing for its citizens.”

In a similar vein, a property consultant, Pelumi Awodiya, said the challenge of homeownership was often compounded by high mortgage rates, limited access to financing, and a lack of long-term funding sources.

He said, “By leveraging pension and insurance funds, the industry can offer long-tenure, low-interest mortgage plans that make homeownership achievable for more Nigerians. This would not only provide individuals with the security of homeownership but also drive economic growth by stimulating the real estate and construction sectors.

“However, for this strategy to be effective, key considerations must be addressed: the regulatory framework and policy alignment. The National Pension Commission and the National Insurance Commission must create enabling policies that allow pension and insurance funds to invest more aggressively in real estate while ensuring the safety of contributors’ funds.

“It is crucial to develop risk management frameworks that protect investments, such as insurance products designed to cover mortgage defaults or property damages.”

According to Awodiya, developing public-private partnerships and real estate investment trusts that attract institutional investors can create large-scale and affordable housing projects.

He added, “Many Nigerians remain unaware of the potential benefits of pension and insurance-backed housing schemes. Increased awareness can drive participation and accelerate adoption. In addition, proper governance and transparency in fund management will be essential to gain public trust and ensure long-term sustainability.

“Ultimately, integrating insurance and pension schemes into housing finance is a viable solution that can revolutionise home ownership in Nigeria. By unlocking long-term capital and making mortgages accessible, Nigeria can move closer to bridging its housing deficit and providing dignified living conditions for its citizens.”

Meanwhile, the treasurer of the Nigerian Society of Engineers, Victoria Island Branch, Babatunji Adegoke, said the proposal to use pension funds as collateral for home ownership was unlikely to make a meaningful impact on Nigeria’s housing crisis.

He asserted, “Given the current minimum wage of ₦77,000, the accumulated pension savings of an average worker would be insufficient to serve as collateral for a mortgage. The reality is that the earnings of most workers are too low to make this policy effective.

“Furthermore, such a move undermines the core purpose of pensions, which is to provide financial security for retirees. Pensions should remain a stable and guaranteed source of income, free from undue financial risks. Using them as collateral could leave retirees vulnerable if borrowers’ default, thereby defeating the very essence of pension schemes.

 “Housing insurance is, however, a viable approach, protecting homeowners against risks such as fire, floods, and structural damage. Insurance will ensure that individuals contribute only a fraction of their resources while securing their homes from unforeseen losses. To truly address the housing crisis, the focus should be on policies that improve mortgage accessibility, provide affordable housing schemes, and enhance workers’ earning capacity. This would offer a more sustainable path to home ownership without jeopardising the financial future of retirees.”