HOUSING: FMBN gets 10,596 applications for N48b NHF Loan

IN a fresh move to provide housing for Nigerians, the apex mortgage institution – Federal Mortgage Bank of Nigeria [FMBN] plans to provide National Housing Fund (NHF) loan to 10,596 applicants, worth about N48 billion.

FMBN Managing Director, Mr. Gimba Ya’u Kumo, announced the new funding last week during the NDIC year 2014 Sensitization Workshop for operators of Primary Mortgage Banks, where he revealed that the processing is already at advance stage. The amount is coming on the heels of the sum of N52.8 billion earlier released to some 14,179 beneficiaries as at August 2014 across the country.

He further disclosed that the Nigerian Deposit Corporation (NDIC) has stepped up measures to check against failures by Primary Mortgage Banks (PMBs) Is who have now come under the Corporation’s deposit insurance scheme through an elevated supervision of the PMIs and sensitization of stakeholders in the sector aimed at safeguarding depositors in the industry.

Kumo who spoke on the overview of the Primary Mortgage Bank industry in Nigeria: Past and Future prospects, said there are a total of 77 licensed primary mortgage banks in the country with some operating as regional while others operate as national institutions with capital bases of N2.5 billion and N3 billion respectively.

According to him, most of them are performing the traditional roles of conducting universal service delivery in the industry as opposed to the modern practice in other climes where PMBs specialize in specific aspect of the value chain such as: origination; collection of repayment; risk management or fund syndication or management.

The FMBN boss listed some of the challenges in the industry today to include “ Dearth of long term funds, resulting in mismatch in creating long-term assets mortgages; high inflation and cost of funds; under-investment in the housing finance sector; lack of secondary mortgage market to provide liquidity; legal issues such as delay in obtaining Governor’s consent costly and cumbersome foreclosure and lack of uniform mortgages among others.”

Earlier, the NDIC Managing Director, Alhaji Umaru Ibrahim said that the recapitalization of the PMBs has resulted in some having National Licenses and mobilizing considerable deposits as well as the creation of significant risk assets, hence it had become necessary to take measures to safeguard depositors and shareholders in the sector.

‘The institutionalization of NMRC as a wholesale financial institution which refinances portfolios of PMBs and DMBs, implies a shift of required core competencies of PMBs to areas like deposit mobilization, creation of risk assets, assets and liabilities management, risk management and financial regulatory compliance as it is in the DMBs, “ he said.

His words: “ The creation of the NMRC, a market of more than N59.5 trillion, as predicted by the World Bank and an ever growing population implies that PMBs are set to experience phenomenal growth. Given the recent regulatory efforts and the associated high cost of cleansing the system of toxic assets of DMBs through the Asset Management Corporation of Nigeria [AMCON], the supervisory authorities are deeply concerned about the build—up of toxic assets of the micro-finance banks [MFBs], which stood at about 45.70 percent as at December, 2013 as against the prescribed maximum of 5 percent.

‘Our attention is now being focused on both the MFB and PMB sub-sectors so as to address the emerging challenges, our efforts can only be successful if the operators can embrace good corporate governance and sound risk management practices, we can not afford the repeat of 2008/2009 crises’ Ibrahim sounded seriously.

Credit: Guardian Newspaper