The House Committee on Housing and Habitat, has called for urgent intervention and support for the Federal Mortgage Bank of Nigeria (FMBN),
By Angela Atabo
The House Committee on Housing and Habitat, has called for urgent intervention and support for the Federal Mortgage Bank of Nigeria (FMBN), to deliver on its mandate of providing affordable housing to Nigerians.
The Chairman of the committee, Abdulmumin Jibrin made this known after an oversight visit to FMBN on Monday in Abuja.
Jibrin said the committee having examined the presentation of the management, have decided to call for more support so the bank would work effectively to serve the nation.
“As a committee I wish to actually state that FMBN is in a dire need of a life support.
“Everybody knows that the bank is the most authentic organisation that can access the low income and medium income off takers.
“By the time organisations like FMBN that has a lengthy history in the housing sector in Nigeria cannot advance mortgages and do not even have the liquidity to carry out its statutory function then I will say the housing sector in Nigeria is in a mess.”
Jibrin said that the committee has taken a position to draw the attention of the Federal Government to take all necessary measures with urgency to resuscitate the organisation.
“This has to be done without further delay otherwise if the bank collapses, the nation will be in real trouble.
“So, as a committee, we have taken a position to make a presentation to the federal government to ensure that any intervention that will come, a special component is put aside to be extended to FMBN so that they can continue to carry out their function,” he said.
Earlier, the Managing Director and Chief Executive Officer of FMBN, Shehu Osidi,said the main focus of FMBN is the collection, management and administration of national housing fund scheme , a mandatory contributory savings.
He said that in support of the Renewed Hope Agenda for the housing sector,FMBN provided 100 billion naira bankable off-takers guarantee to real estate developers executing the construction of affordable houses.
He added that the ongoing process automation in the bank and adoption of the enterprise Core Banking Application (CBA),is currently at 94 per cent and expected to be concluded before the year runs out.
Osidi said the bank introduced new products to drive the integration of the informal sector into national housing fund to expand access to more Nigerians.
He listed the products to include :home improvement loan, rent assistance ,non-interest rent-to-own and NHF diaspora mortgage loan.
He added that the bank increased its loan limit from 15 million naira to 50 million to meet the financing need of higher medium income earners and address challenges of higher construction costs.
He said that there was need for the recapitilisation of FMBN to the tune of a minimum of 500 billion naira.
Osidi however, lamented that the resolution of the CBN prudential guidelines on single obligor was limiting FMBN’s lending capacity to 50 per cent of its shareholders funds unimpaired by losses.
“The impact of this regulation is that it has severely curtailed FMBN’s ability to originate new mortgage loans due to its low capitilisation and that of the PMBs.
“FMBN has argued that the NHF Act which provides the limitation of 50 per cent of PMBs’ shareholders ‘ funds unimpaired by losses per annum being a superior legal provision to prevail has been resisted by CBN.
“These issues highlight the overarching need for the CBN’s review of its prudential guidelines to be more amendable for the long-term nature of mortgage lending rather than shot-term lending of commercial banking.”
Osidi also sought for the support of the House Committee for the review of the FMBN and NHF Acts.(NAN)
