The Nation Newspaper

Tag: FMBN

  • FMBN spends N1.4b on housing units in Niger

    The Federal Mortgage Bank of Nigeria (FMBN) has disclosed that N1.4 billion have been expended for the development of 379 housing units in Niger State just as the Minister of State for Power, Works and Housing, Alhaji Mustapha Baba Shehuri, said the nation needs 17 million houses to meet up with the challenge of housing deficit.

    The Minister who stated this at the commissioning of the Federal Mortgage Bank of Nigeria and Sea Mountain 133 Housing Estate in Minna, Niger state said that with the need of 720, 000 housing units per annum, the annual aggregate production of 100 housing units is not tenable to meet the huge gap of housing in the nation.

    “The Ministry of Power, Works and Housing will continue to strive to ensure that the challenges of housing deficit in Nigeria which has been put at 16 to 17 million units is surmountable.

    “With a population of about 200 million that is growing at an average rate of three per cent per annum couple with an annual rural urban migration rate of over 5 per cent, Nigeria is said to be in need of about 720, 000 housing units per annum. Currently, the annual aggregate production is about 100,000 housing units, thereby leaving a huge gap.”

    The Minister said that the Ministry’s plan to build mass housing units in every state of the federation for public workers annually over the next three years has reached an advanced stage of implementation.

    He further said that National Housing Models have been designed and approved for each geo-political zone while commending the Federal Mortgage Bank of Nigeria for its efforts in stepping up to the challenge of housing deficit.

    In his address, the Managing Director, Federal Mortgage Bank of Nigeria, Mr. Richard Esin said the estate which comprises of 51 units of three bedroom bungalows and 82 units of two bedroom bungalows costs N5 million for two bedroom semi-detached bungalows and N7 million for 3 bedroom fully detached bungalow.

    According to him, FMBN has invested N1.4 billion for the development of 379 housing units in Niger state emphazing on its mandate to provide Nigerians access to mortgage finance at affordable rates to enable them own houses of their own.

    Esin then appealed to the Niger state government to resume remittance of workers contribution to the National Housing Fund to enable them access the National Housing Fund mortgage loans.

  • FMBN signs $2b MoU with Shelter Afrique, REDAN

    FMBN signs $2b MoU with Shelter Afrique, REDAN

    The Federal Mortgage Bank of Nigeria (FMBN) has signed a $2billion tripartite Memorandum of Understanding with Shelter Afrique, and Real Estate Developers Association of Nigeria (REDAN).

    The agreement, which was signed at the weekend, involves a commitment by Shelter Afrique to avail the sector of $2billion construction finance towards housing provision in Nigeria.

    The Acting Managing Director of the Federal Mortgage Bank of Nigeria, Mr. Richard Esin, said the collaboration was a “proactive step taken in recognition of the opportunities that would arise from the launch of a National Housing Model.

    He said: “The objective of the strategic collaboration is to harness each party’s competencies and strengths in the areas of training, research, advocacy, and mobilisation of financial resources, both international & domestic, in support of projects of mutual interest to ensure the successful delivery of affordable housing in Nigeria and involves a commitment by Shelter Afrique to avail the sector $2 billion construction finance towards housing provision in Nigeria.

    “The development is coming at an auspicious time in the life of the bank when it has moved from a deficit position to operating surplus in 2016, creating 736 individual mortgages up to the tune of N5.4billion within the period.

    “We are optimistic that the partnership would result in the growth of the sector and lead to an increase in the contribution of the sector to the nation’s Gross Domestic Product. He called for the commitment of all parties to the successful execution of the programme.

    The President of the Real Estate Developers Association of Nigeria (REDAN), Rev. Ugo Chime commended all the parties involved.

    He said the cooperation was a “strategic attempt to create a seamless interface from construction finance to mortgage finance and all in-between, towards easing the challenges faced in the sector.”

    He called for immediate recapitalization of the Federal Mortgage Bank of Nigeria (FMBN) by the Federal Government, to ensure that it has the capacity to finance mortgages.

    He said the mortgage sector was expected to rise by annual $200million construction finance injection.

    The Managing Director/Chief Executive, Shelter Afrique’, Mr. James Mugerwa, said  the occasion was a turning point for the housing sector in Nigeria.

    He expressed delight to be part of “such strategic alliance, which aims to forge an end to end solution that addresses issues within the entire value chain, from supply to demand.”

    He called for commitment and dedication in order to achieve the set objectives.

  • Reps to investigate BoI, BoA, FMBN, NERFUND, others

    •To probe banks, others over casualisation of jobs

    The House of Representatives is to investigate the activities of federally-owned development financial institutions (DFIs) over their failure to fulful their statutory mandates.

    An ad-hoc committee that will undertake the investigation is expected to also proffer solutions on ways of streamlining the institutions’ activities with a view of repositioning them for effective service delivery.

    The resolution of the House followed the adoption of a motion by Chukwuemeka Ujam (PDP, Enugu), who regretted that the primary aim of establishing DFIs like the Bank of Industry (BoI),  Bank of Agriculture (BoA), Small and Medium Enterprises Development Agency (SMEDAN), National Economic Reconstruction Fund (NERFUND), and the Federal Mortgage Bank of Nigeria (FMBN) among others has been defeated.

    According to him, none of the DFIs has been able to meet its mandate of providing long-term financing to the industrial and productive sector of the economy.

    He also said that the DFIs, set up to finance the establishment of large, medium and small scale industries,  as well as facilitate the expansion, diversification and modernisation of the existing concerns have failed to carry out their set objectives.

    He said: “It is of concern that despite the huge budgetary provisions being made for these DFIs over the years, their impact in stimulating economic renaissance is yet to be felt as these agencies have seemingly been unable to fulfill their statutory mandares, the resultant effect being the stultification of the nation’s economic growth.

    “I am however convinced that the current economic challenges being experienced in the country can be reversed within the shortest possible time if these DFIs are made to live up to their statutory obligations.”

    The ad-hoc committee has six weeks to report back to the House after the motion was unanimously passed.

    Similarly, the  House has mandated its Committee on Labour, Employment and Productivity to investigate the incidence of casualisation and outsourcing of jobs in both private and public sectors of the economy.

    This followed the adoption of a motion by Wale Raji (APC, Lagos), who noted that casualisation and outsourcing of jobs negates the provision of Section 7(1) of the Labour Act that no worker should be engaged on probation or temporary employment for more than three months.

    Raji said: “It is however disturbing that some employers, especially in the banking and sectors, in an attempt to cover up their illegal acts, outsourced jobs to firms to recruit workers for them.

    “We should be concern about the negative effects of casualisation on workers which lead to deprivation of employment benefits and lack of legal status  thus making them dispensable at the convenience of the employers.”

    The Committee was given six weeks to report back to the House for further legislative action.

    In a similar development, the House also has also mandated Committees on Commerce as well as Industry to liase with the Ministry of Commerce and Industry, and Trade and Investment to formulate a blueprint that would encourage manufacturers of cell phones, electronics and electrical appliances tonsite theoe factories in Nigeria.

    Following the adoption of a motion by Henry Archibong (PDP, Akwa Ibom), the lawmakers pointed out that the  technological, financial and economic gains Nigeria stands to benefit from the localization of the plants and factories of those manufacturers through job creation and reduction of capital flight are immense.

    The mover of the motion said the import duties paid for the importation of the finished items are not commensurate with the skills and manpower training that will be acquired by millions of Nigerians across the country if such plants and factories are sited in Nigeria.

    The joint Committee was given six weeks to complete its assignment.

     

  • Where will FMBN get N59.5tr to bridge housing gap?

    Where will FMBN get N59.5tr to bridge housing gap?

    Bridging the 17 million housing gap is not easy and the Federal Mortgage Bank of Nigeria (FMBN) knows this too well. According to the World Bank, it will cost N59.5 trillion to close the gap through affordable housing. But part of the cash to do this is being held up by unscrupulous developers. To fulfil its mandate, the FMBN has got the backing of the Economic and Financial Crimes Commission (EFCC) in recovering the cash. COLLINS NWEZE examines the steps taken by FMBN to deliver affordable housing to National Housing Fund (NHF) contributors.

    Adequate housing provision has, over the years, engaged the attention of most countries, especially the developing ones, as it is one of the three most important basic needs of mankind–others being food and clothing.

    Expectedly, programmes of assistance in the areas of finance, provision of infrastructure and research have been designed by governments (both the Federal and the states) to enhance adequate housing delivery. The focus on finance has, however, been very prominent because housing provision requires huge capital outlay, which often is beyond the capacity of the medium income/low income groups.

    A major area of concern has been mortgage financing, which has often been fingered as one of the most formidable constraints in the housing sector.

    It is in recognition of the critical importance of finance in housing delivery that the Federal Mortgage Bank of Nigeria (FMBN) under the leadership of its Acting Managing Director/CEO, Richard Esin, is working hard to achieve efficient and sustainable credit delivery to the housing sector.

    The FMBN, under Esin, has been expanding and coordinating mortgage lending on a nation-wide basis, and is also promoting affordable housing to ensure that 17 million housing deficits, estimated to cost N59.5 trillion, is addressed.

    It was the FMBN that started the management and administration of the contributory savings scheme known as the National Housing Fund (NHF), which enabled it mobilise long-term funds from Nigerian workers, banks, insurance companies and the Federal Government to advance loans at soft interest rates to contributors.

    The FMBN finances mortgages created by primary mortgage institutions (PMI) under the NHF scheme, and also gives estate development loans (EDL) to real estate developers.

    The new FMBN boss understands that achieving set objectives would require the collaboration and support of the Economic and Financial Crimes Commission (EFFC) to recover FMBN cash in the hands of developers, who collected funds but failed to deliver on agreed projects.

    Esin is also focusing on cheap and affordable housing, not exceeding N5 million per unit, to ensure that more people key into the project even as the FMBN continues to encourage more people in various states within the federation, government parastatals, and the masses to key into the project.

    The Esin-led FMBN has, therefore, requested the help of the EFCC to recover of its huge bad debts from developers and others, who obtained housing loans from it, but misappropriated the fund. He made the request when he paid a courtesy call on the chairman of the commission, Ibrahim Magu, in Abuja.

    Esin informed the anti-graft boss that, but for the resilience of the bank, it would have been unable to meet the financial requests of thousands of Nigerians, including staffers of the EFCC because of defaulters.

    He disclosed that the concerned developers have a huge debt overhang with the bank, saying that they obtained construction finance loans from the bank to build estates, but diverted the funds into other non-productive and non-regenerative activities. According to him, some developers completed the estates, sold the housing units and failed to remit the sales proceeds to the bank.

    Esin said some Primary Mortgage Banks, which obtained funds from the bank for Mortgage Finances, for on-lending to qualified NHF contributors, declined to disburse the funds to the applicants.

    Besides, there were those, who obtained equity contribution from would-be mortgagors, but refused to deploy same in the provision of mortgage finances to the applicants’ benefit.

    Esin expressed the worry that despite the revocation of their operational licences, some Primary Mortgage Banks (PMBs) operators are still deceptively encouraging innocent and unsuspecting mortgagors to continue to repay their mortgages to them through fictitious accounts with no intention of remitting same to FMBN.

    He appealed to Magu to assist in the recovery of bank funds from contractors and vendors, who were mobilised to execute various contracts for the bank but failed to execute same and misappropriated the bank’s money. “These activities are fraudulent, and constitute financial crimes. We, therefore, seek the EFCC’s kind assistance in the recovery of these funds, which belong to the Nigerian workers.”

    Speaking further, Esin informed Magu that his management remained committed to helping the staffers of the commission own houses, noting that after the historic MoU between both organisations, the FMBN has disbursed N3 billion in 10 batches to 156 staffers of the EFCC.

     

    EFCC staffers key into the NHF project

    Among the government agencies that have keyed into the NHF project is the EFCC. The FMBN has packaged a N1.6 billion worth of National Housing Fund loans for 113 staffers of EFCC. The loan is currently awaiting board approval, while N1.3 billion has been approved as NHF loans for EFCC staffers but not disbursed because the targeted houses are no longer available.

    “FMBN will work with other interested PMBs to revive the scheme once they are able to provide the bank with a suitable and acceptable security,” he said.

    He assured the EFCC Chairman that the FMBN was in support of the war against corruption, hinged on one of the four pillars of the bank’s self-reinvention journey of corporate governance restoration, starting with a corporate governance audit of FMBN and staff training for over 120 members of staff in the leadership cadre, by the BPP on procurement practices and processes to engender the right kind of ethical behaviour among the staffers.

    He also informed Magu about the establishment of a vibrant Anti-Corruption and Transparency Unit (ACTU) in the bank and training of over 120 members of staff in the leadership cadre by staffers of Independent Corrupt Practices Commission (ICPC) on anti-Corruption programmes.

    The FMBN, under Esin, has also brought into operation, the globally acclaimed Anti-Money Laundering and Combating of Terrorism Financing Manual, which would serve as key guide in driving “our operations and the management of all facets of its relationships with stakeholders”.

    “We have also redefined our business to sharply focus on the low and middle income earners, collaborating with credible developers to deliver affordable houses at not more than N5 million per unit, to enable us achieve the required spread among NHF contributors in the delivery of mortgages. Our goal is to make affordable mortgages, a veritable tool in the fight against corruption,” Esin told Magu.

    He continued: “We have introduced the FMBN Home Renovation Loan for interested contributors desirous of renovating their homes via home expansion and other forms of value-enhancement. We will encourage members of staff of EFCC to take advantage of these opportunities for their benefit,” the FMBN Acting Managing Director added.

     

    Recapitalisation of FMBN

    The Federal Government has disclosed plans to re-capitalise the FMBN for better efficiency. Minister of Power, Works and Housing, Babatunde Fashola, disclosed this at the Summit on Affordable Housing, 2016 in Abuja that the move became imperative for the mortgage institutions to deliver affordable housing to the masses.

    Besides, President of the Association of Professional Bodies in Nigeria, Bala Ka’oje tasked the Muhammadu Buhari administration to make available to the FMBN a bailout fund of N100 billion as well as “overhaul and restructure the FMBN for effective housing delivery”. Already the restructuring of FMBN is on-going and the new team headed by Esin is committed to getting affordable housing to the masses.

    An estate developer based in Lagos, Stephen Okiro, urged the FMBN to continue to provide affordable housing to the people. “Affordable is housing for which the associated financial costs are at a level that does not threaten other basic needs. States should take steps to ensure that housing costs are proportionate to overall income levels, establish subsidies for those unable to acquire affordable housing, and protect tenants against unreasonable rent levels or increases,” he said.

    Besides, the Nigeria Mortgage Refinance Company (NMRC) has been established and has been able to provide a uniform underwriting standard for the Nigeria’s mortgage market.

    The Central Bank of Nigeria (CBN) said the Mortgage Refinance Companies (MRCs) are required to have a minimum of 50 per cent of their investment in debt obligations issued or guaranteed by the Federal Government or any of its agencies.

    Statistics showed that Nigeria is a peculiar country where mortgage finance, as a share of Gross Domestic Product (GDP), is extremely low. At a paltry 0.5 per cent, compared with 80 per cent (UK), 77 per cent (USA), 31 per cent (South Africa) and two per cent (Ghana), it is a huge joke. The housing and construction sector accounts for only 3.1 per cent of Nigeria’s rebased GDP. Housing production is at approximately 100,000 units per year while 800,000 units are needed yearly.

    As a result of this lack of a robust mortgage financing system, Nigeria’s rate of home ownership is one of the lowest in Africa at 25 per cent. Statistics showed that Nigeria’s home ownership rate is much lower than countries such as Singapore (90 per cent), Indonesia (84 per cent), Kenya (73 per cent), USA (70 per cent), Benin Republic (63 per cent) and South Africa (56 per cent).

    Esin has, therefore, accepted the responsibility of delivering on the mandate of the bank and carry forward the modest achievements of his predecessors.

  • FMBN seeks EFCC’s assistance on debt recovery

    The Federal Mortgage Bank of Nigeria (FMBN) has solicit the support of the Economic and Financial Crimes Commission (EFCC), in the recovery of its huge bad debts from developers and others, who obtained housing loans from it but misappropriated the fund.

    Acting Managing Director of the apex mortgage bank, Richard Esin, made the request when he paid a courtesy call on the chairman of the EFCC, Ibrahim Magu, at the weekend, in Abuja.

    Esin informed the anti-graft boss that, but for the resilience of the bank, it would have been unable to meet the financial requests of thousands of Nigerians including members of staff of the commission because of defaulting developers.

    He disclosed that the concerned developers have a huge debt overhang with the bank, explaining that they obtained construction finance from the bank to build estates, but diverted the funds into other non-productive and non-regenerative activities.

    According to him, some developers completed the estates, sold the housing units and failed to remit the proceeds to the bank.

    Esin said some Primary Mortgage Banks, which obtained funds from the bank for Mortgage Finances, for on-lending to qualified National Housing Fund (NHF) contributors, declined to disburse the funds to the applicants; while others obtained equity contribution from would-be mortgagors, but refused to deploy same in the provision of mortgage finances to the applicants’ benefit.

    Esin expressed worry that despite the revocation of their operational licences, some of the operators of the Primary Mortgage Banks (PMBs) are still deceptively encouraging innocent and unsuspecting mortgagors to continue to repay their mortgages to them through fictitious accounts with no intention of remitting same to FMBN.

    He appealed to Magu to assist in the recovery of bank funds from contractors and vendors who were mobilised to execute various contracts for the bank, but failed to execute same and misappropriated the bank’s money.

    “These activities are fraudulent, and constitute financial crimes. We, therefore, seek the EFCC’s kind assistance in the recovery of these funds which belong to the Nigerian workers,” he said.

    Speaking further, Esin informed Magu that his management remains committed to helping members of staff of the commission own houses, noting that after the historic MoU between both organisations, the FMBN has disbursed N3 billion in 10 batches to 156 staff members of the commission.

    He further disclosed that N1.6 billion worth of NHF loans for 113 members of staff of EFCC packaged by FGMB are currently awaiting board approval, while N1.3 billion has been approved as NHF loans for EFCC staff, but not disbursed because the targeted houses are no longer available.  “FMBN will work with other interested PMBs to revive the scheme once they are able to provide the bank with a suitable and acceptable security,.” he said.

  • As housing sector reforms begin with FMBN

    NEVER since the advent of the Nigerian Building Society in 1956 or its re-christening as the Federal Mortgage Bank of Nigeria in 1977 or the promulgation of the Mortgage Institutions Act (1989) and the FMBN Act 82 (1993), in 1994, when the FMBN was accorded the status of the apex mortgage institution in the country, has the housing deficit in the country more daunting than now. Unlike many other countries with similar challenges, an estimated 80 per cent or over 130 million Nigerians live in indecent, informal housing structures with no basic amenities and in deplorable conditions. Only a few own the houses they live in. The housing deficit of Nigeria, according to the World Bank, is estimated at a whopping 17 million units. In densely populated commercial and urban centres such as Lagos, Abuja, Port Harcourt and Kano, squatters outnumber those decently accommodated. The same World Bank values the cost of the 17 million housing deficit at about N59.5 trillion. Yet another informed stakeholder, a two-time member of the House of Representatives, who was also Minister of Sports and now President of the Association of Professional Bodies in Nigeria, Bala Ka’oje only last Monday, tasked the Muhammadu Buhari administration to make available to the FMBN a bailout fund of N100 billion as well as “overhaul and restructure the Federal Mortgage Bank of Nigeria (FMBN) for effective housing delivery.” Already the restructuring of FMBN is ongoing and the new team headed by its Managing Director, Mr. Richard Esin, is not leaving any stone unturned. If snippets from the team’s activities are anything to go by, it seems the burden on the supervising Minister for Housing, Babatunde Fashola, would be less in the way they are strategically addressing the challenges of housing deficit inherited by this administration. While it cannot be denied that funding is a major challenge of the housing sector, it requires leadership, the right policy and its effective implementation, as well and sincere and efficient deployment of resources to bridge the housing deficit in the country. There is no gainsaying the fact that the provision of housing transcends the mere provision of shelter. It facilitates urban development and at the same time promotes the socio-economic wellbeing of a people, especially when tailored towards the attainment of home ownership. Shelter is not only a basic need of life, housing is the right of every woman, man, youth and child to acquire and a desideratum for sustaining a secure home, family life and community and to live in peace and dignity. The right to housing is codified as a human right in the Universal Declaration of Human Rights: “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.” (Article 25(1)) Affordable housing is housing for which the associated financial costs are at a level that does not threaten other basic needs. States should take steps to ensure that housing costs are proportionate to overall income levels, establish subsidies for those unable to acquire affordable housing, and protect tenants against unreasonable rent levels or increases. Nigeria is a peculiar country where mortgage finance (as a share of GDP) is extremely low. At a paltry 0.5 per cent, compared with 80 per cent (UK), 77 per cent (USA), 31 per cent (South Africa) and two per cent (Ghana), it is a huge joke. The housing and construction sector account for only 3.1 per cent of Nigeria’s rebased GDP. Housing production is at approximately 100,000 units per year while 800,000 units are needed yearly. As a result of this lack of a robust mortgage financing system, Nigeria’s rate of home ownership is one of the lowest in Africa at 25 per cent. Statistics show that Nigeria’s homeownership rate is much lower than countries like Singapore (90 per cent), Indonesia (84 per cent), Kenya (73 per cent), USA (70 per cent), Benin Republic (63 per cent) and South Africa (56 per cent). In addition to these obstacles to home ownership, Nigerians face daily battles with poverty, unemployment, low human development index (HDI), low access to clean water and improved sanitation and incessant power outages. A large percentage of Nigerians are unbanked as only about 40 per cent of the adult population is financially included. One is therefore gratified about the current restructuring of the FMBN embarked upon by President Muhammadu Buhari when he brought in Richard Esin. A man of few words, he has accepted the responsibility to deliver on the mandate of the bank and carry forward the modest achievements of his predecessors. A snapshot into his four months’ stewardship can be gleaned from his account at the ongoing 15th Lagos Housing Fair. Speaking through Mr. Yusuf Yinusa, the Lagos Zonal Coordinator of the bank, he reported how the National Housing Fund (NHF) has hit N191.9 billion in March from 4.14 million registered contributors under scheme. Esin also said that N5.9 billion had been refunded to 118,284 individuals who met conditions for refund, while over 70 per cent of the cumulative collection was recorded in the last five years. Section 14(2) of the NHF Act of 1992 stipulates that a contributor to the NHF can access a loan from the fund for the purpose of building, purchasing or renovation of existing homes /houses. If this is made truly compassionate, with security and opportunity at its heart, the nation will be inching towards affordable shelter. As Nigerians look forward to the concessionary loan windows promised by Esin to enable them access mortgages for home ownership at affordable interest rates, it is laudable that the NHF managed by the bank has financed the construction of about 25,606 housing units and advanced 16,506 mortgage loans. While disbursements are pending, according to the Acting MD, for the delivery of additional 15,085 housing units and 10,726 mortgage loans, the bank has already entered into partnership with the Federal Housing Authority (FHA); Assets Management Company of Nigeria (AMCON) and state governments to ensure that the challenges of lack of access to land, inadequate funding for the housing sector, inaccessibility of mortgage loans due to lack of proper title to properties, low income of prospective borrowers which affects affordability, cumbersome procedures for obtaining governors’ consent to land transactions which is also costly, are addressed. Laudable as Esin’s prognosis have been, I hasten to say that conceptualisation of some quick wins that would allow a greater number of Nigerians access to the bank’s FMBN Home Renovation Loan (FHRL), to renovate or improve existing properties which are personally owned by them or through family ownership, will become visible with continued efforts of the repositioned FMBN and stakeholders. In all these, however, a greater challenge has been identified: communicating the NHF to both its contributors and other stakeholders in the housing sector for greater participation and increased success in delivering affordable mass housing to the Nigerian populace. Esin must therefore design and implement a sincere communication strategy that we can hold him accountable to. •Ms Johnson is the editor of The Whistler newspaper

  • FHA, FMBN partner for better housing delivery

    FHA, FMBN partner for better housing delivery

    The Federal Housing Authority (FHA) and the Federal Mortgage Bank of Nigeria (FMBN) are to work together to boost housing delivery.

    Following a meeting in Abuja, they agreed to explore the possibility of using the National Housing Fund (NHF) being administered by FMBN to create mortgage for subscribers to FHA houses in the country’s six geopolitical zones.

    FHA Managing Director Prof Mohammed Al-Amin and FMBN Acting Managing Director Mr Richard Esin met in Abuja last month  at the instance of the Minister of Power, Works and Housing, Mr. Babatunde Fashola.

    A statement issued at the end of the meeting, said FHA and FMBN acknowledged that as major players in the housing equation,  they have roles to play in driving the new initiative. The agencies said it was imperative for them to build sustained synergy and collaboration in playing their roles under the new national housing progamme.

    Al-Amin spoke of regulatory challenges, promising that stakeholders would make efforts to overcome them. An enabling environment is to be created to encourage foreign investors to participate in the development of new towns around the country. A joint committee of FHA and FMBN officials will drive the process.

    The committee will also consider the viability of the Northeast Intervention Housing Programme proposed by FHA and forward its recommendations to Al-Amin and Esin respectively.

    Also included in the committee’s task is the exploration of areas for further assistance by FMBN to FHA Mortgage Bank Limited- a subsidiary of FHA, to enable it participate in the integrated housing scheme.

    Both Al-Amin and Esin commended President Muhammadu Buhari for initiating the one million housing units per year programme. They expressed optimism that the programme, if diligently implemented, would facilitate the recovery of the economy, frontally tackle the nation’s housing deficit, create employment for the youths and improve the economic well-being of the people.

    For stakeholders in the industry, the collaboration of the two agencies saddled with housing provision is a welcome development. This is because for several years, the expected synergy has not existed between both organisations, which according to observers, is partly responsible for the huge gap in the nation’s housing requirement.

    The two chief executives decided that their meetings would hold regularly “in order to strengthen their collaboration towards improved housing delivery in the country”, the statement read.

    To strengthen this development, the FMBN will also collaborate with the Nigerian Mortgage Refinance Corporation (NMRC) towards strengthening the secondary mortgage market of the industry. This is part of the refocusing of the apex mortgage banker’s business model aimed at addressing the lower end of the income ladder, which aims at the mass market for housing delivery.

    Esin, while welcoming the NMRC Chief Executive, Professor Charles Inyangete, to his office, said the aim would be achieved by taking advantage of the concessionary (below-market) mortgage loan terms under the National Housing Fund (NHF) Scheme being managed by the Bank.

    Inyangete observed that while both firms serve different market segments, the challenges faced are common to the Nigerian Housing/Mortgage sector. This, he noted, requires both institutions adopting a collaborative and complementary approach to addressing such issues. He, therefore, expressed hope of more positive interaction and the need for synergy between the institutions, which are set up to address various income segments of the Nigerian mortgage market.

    Areas for a common synergy identified by both parties include the review of land and property registry practices for time and cost-effectiveness; the enactment of a foreclosure law to mitigate mortgage lending risks; the introduction of industry-wide uniform underwriting standards and the development of a data collection system for the Nigerian mortgage market. A committee is to be set up to further explore and deepen the new relationship in line with the identified areas of collaboration.

  • Coalition hails FMBN chief Kumo

    The Coalition of Non-Governmental Organisations for Change has hailed the Managing Director and Chief Executive of the Federal Mortgage Bank of Nigeria (FMBN), Gimba Yau Kumo, for his “laudable achievements”.

    The coalition, which comprises students, artisans, traders and the civil society, in a communiqué by its President, Wole Badmus, at the end of its roundtable at the weekend, said Kumo deserved accolades for revamping housing financing.

    The communiqué reads: “The FMBN revamped corporate governance and risk management structure in line with international best practices; improved housing delivery through Ministerial Pilot Housing Scheme in conjunction with the parent Federal Ministry of Lands, Housing and Urban Development using the public-private partnership model and improved lending for estate development and mortgage financing for affordable home ownership in the country.

    “The products portfolio of the apex mortgage bank was also boosted to include services to the non-salaried/informal sector which accounts for about 85 per cent of the working population. The builders’ bank also under his stewardship focuses on cooperative societies and trade unions. The bank’s latest products include the Nigeria Diaspora Mortgage Scheme that provides opportunities for Nigerians abroad to acquire houses in the country.”

  • Fed Govt moves to insure mortgages

    Fed Govt moves to insure mortgages

    The National Insurance Commission (NAICOM) and the Federal Mortgage Bank of Nigeria (FMBN) have agreed to collaborate to insure all mortgages in the country.

    The partnership, if implemented, is expected to deepen insurance penetration and provide the much needed funds required by the National Housing Fund (NHF) to enable it bridge the country’s housing deficit.

    The achieve this, both regulatory agencies agreed to enforce compliance with Section 5(2) of the NHF Act which “prescribes that every registered insurance company shall invest a minimum of 20 per cent of non-life funds and 40 per cent of life funds in real property development of which not less than 50 per cent shall be paid into the NHF through FMBN.”

    Speaking during a meeting between both organisations in Abuja, Commissioner for Insurance, Mr. Mohammed Kari said: “The most important thing is the synergy we are trying to create to ensure that what is due to the mortgage sector goes to the mortgage sector.”

    He said FMBN had “promised that all mortgages must be insured which is what the law expects but has not been enforced.”

    In addition, “primary mortgage institutions, will ensure that every mortgage is insured properly and every finance in that sector is insured properly; and that is going to be a big boost to the insurance industry as it’s going to increase penetration and provide more funds to the national housing fund to be able to invest in their projects.”

    Kari assured that NAICOM would ensure that all operators will comply with the law, whether they like it or not, adding that “that’s what laws are for and we believe it will help also in reducing the deficit in housing.”

    FMBN Managing Director, Mr. Gimba Ya’u Kumo said the two organisations have agreed that to some extent, NAICOM would try to talk to the insurance companies to see how much of that is coming to the table, noting that “the additional funds expected to be generated would help to significantly reduce the housing deficit.”

    He said the FMBN would soon introduce an innovative product to make housing more affordable to Nigerians known as “rent run”.

    Kumo said: “As you are paying your rent, when you finish payment for the cost of the house, the house becomes yours. That has been the practice all over the globe; so we would start to implement some of these international best practices so that Nigerians would have comfort.”

  • Impacts of FMBN on housing delivery in Adamawa State

    I had the privilege of being the guest speaker during the ground-breaking ceremony for the Bindow Housing Estate, Yola on 19th August, 2015. The ceremony flagged off the programme of His Excellency, Senator Muhammad Bindow Jibrilla, Governor of Adamawa State, for improving housing delivery in the State. I would like to congratulate him and the people of Adamawa State for the good works he has so earnestly begun.

    It is a good time for housing in Nigeria. The Federal Government of President Muhammadu Buhari has targeted the delivery of one million housing units per annum, as part of his bold measures to close the supply gap for housing in the country. Based on the empirical evidence that the construction of a three-bedroom unit creates up to 17 jobs, the President’s housing initiative will create 17 million jobs.

    Part of the recent major developments in the housing sector was the approval of the National Policy on Housing. The policy makes provision for social housing for low- and no-income earners; emphasizes private sector-led housing delivery; more robust financing; improvement in institutional capacity to deliver housing; and inclusion of local content and adoption of local building materials.

    As the foremost institution facilitating affordable housing in the country, the Federal Mortgage Bank of Nigeria is proud that the people of Adamawa State have always embraced the National Housing Fund (NHF) scheme of FMBN. This ensures that we are ever ready to support housing initiatives in the State. As at April 2015, the State contributed a total of N2.97 billion to the NHF scheme, being 2.5% deductions from workers’ monthly income.

    The FMBN has in turn invested a total of N2.8 billion in supporting the provision of affordable housing in Adamawa State. This was by way of disbursing N1.62 billion under FMBN’s Estate Development Loans (EDLs) to the State-owned Adasolid Properties Ltd, and to two private developers, for the construction of about 500 housing units which have been successfully completed and sold to NHF contributors in the State. Another EDL of over N800 million for additional 240 units is being finalized.

    With the housing units already delivered, we estimate that FMBN has contributed to the creation of no less than 8,500 jobs in Adamawa State.

    Aside from Estate Development Loans, Federal Mortgage Bank of Nigeria has also provided affordable mortgage loans of about N1.18 billion to 833 beneficiaries through Adamawa Savings and Loans Ltd. I wish to assure that FMBN will be providing mortgage loans at an affordable interest rate of 6%, repayable over 30 years, for the off-takers of the Bindow Housing Estate, Yola as part of our contribution to the success of the new housing project.

    In line with addressing the shelter needs of our most unfortunate fellow citizens that were affected by the insurgency and violence in the North East region, I wish to assure that the FMBN will also be actively involved in the implementation of the Federal Government’s resettlement programme for Internally Displaced Person (IDPs), being anchored by the Federal Ministry of Lands, Housing & Urban Development. I am reliably informed that as part of its contribution, the Adamawa State Government has expeditiously provided unencumbered land for this worthy intervention.

    In general, Federal Mortgage Bank of Nigeria is focused on service improvement and operational efficiency. The National Housing Fund scheme has become the cornerstone of the strategic deployment of our corporate resources. For instance, we deployed the NHF e-Collection Platform for transparency and accountability in the NHF process, while providing the contributors, including those in Adamawa State, access to up-to-date records of contributions online.

    Our products portfolio is being boosted to include services to the non-salaried/informal sector which accounts for about 85% of the national working population. We are also focusing on cooperative societies and trade unions. Our latest products are the Nigeria Diaspora Mortgage Scheme which will provide opportunities for Nigerians living abroad to acquire houses in the country after minimum of two years of contribution to the NHF. We have also innovated by developing the Home Renovation Loan which will enable contributors have access to quick loans to improve their housing conditions, at very affordable rates. These products, which will be launched by His Excellency, President Muhammadu Buhari very shortly, will also make impacts in housing delivery in Adamawa State as with every state of the country; but in particular those states that have signed up to the National Housing Fund.

    I would like to make some recommendations. No nation can develop structurally and economically without housing being on the front burner. As the efforts at eradicating the threats of insurgency and violence have intensified, Governments at both the Federal and State levels must, as a matter of urgency, commence the rebuilding of lives and property.

    In this regard, I would like to commend Governor Bindow Jibrilla, who has shown leadership in addressing this national imperative in earnest. The ground-breaking for the Bindow Housing Estate within his first 100 days is indeed very commendable.

    It will be recalled that after the World War II, the conquering U.S. Government embarked on the European Recovery Programme. This programme, popularly known as the Marshall Plan, helped to rebuild European economies that were battered by the war. While the activities of the insurgents in the North East remain deplorable, we are happy that we continue to see various efforts at rebuilding our towns and villages, and more importantly, lives.

    Construction is one of the most effective ways of rebuilding lives and the economy. It does not only help in effectively reclaiming lost territory and pride; it revitalizes trading activities; boosts social interaction; and restores a sense of normalcy in daily life. However, much more than these, housing construction will provide our teeming youths the much-needed employment from which they will gain a sense of belonging in the society; and, therefore, shun anti-social and criminal tendencies.

    As part of the strategies in providing a suitable environment for housing construction-led boom, I would like to make some assertions. Closer collaboration between the Federal and State Governments is very important in making unencumbered land available for housing development. This will also improve intergovernmental agency partnership in housing delivery. Review of the legal and regulatory framework for housing and mortgage finance, especially the reduction of time and cost of transfer and titling of property, is very germane.

    Increased workers’ enlightenment on the benefits of the National Housing Fund (NHF) scheme and interaction with Federal Mortgage Bank of Nigeria is also very important. As mentioned earlier, FMBN is embarking on a Home Renovation Loan Scheme that will be of immense benefit to workers. However, the prospective beneficiaries are contributors to the NHF Scheme.

    Finally, there is need for improvement in stakeholder collaboration in housing delivery. While FMBN will continue to reach out to every potential and existing contributor, it requires the support of state governments and labour groups for us to fulfill our mandate under the Scheme.

    I wish to reiterate the determination of the Federal Mortgage Bank of Nigeria to sustain its drive for affordable mass housing delivery for low and medium income earners. Although the Bank is facing funding challenges due to reliance on only NHF contributions at present, we will continue to improve our work processes and service delivery to satisfy the yearnings of NHF contributors within the limits of our resources.

    On behalf of Federal Mortgage Bank of Nigeria, I would like to congratulate Governor Bindow Jibrilla once again, and assure him and the other state governors of our enduring support in housing delivery as a key strategy of moving the nation forward.

    • Gimba Ya’uKumo, OON, is Managing Director and Chief Executive Officer, Federal Mortgage Bank of Nigeria