FMBN rues constraints to housing loans

Gimba Ya'u Kumo, MD/CEO, Federal Mortgage Bank of Nigeria

Gimba Ya’u Kumo, MD/CEO, Federal Mortgage Bank of Nigeria

The Federal Mortgage Bank of Nigeria (FMBN) has disclosed that only 1.5 percent of the four million registered contributors to the National Housing Fund were able to access mortgage loans in Nigeria. This 1.5 percent represents 60,000 beneficiaries. According to the Federal Mortgage Bank of Nigeria the dismally low number of beneficiaries is due to many constraints to housing finance in Nigeria, which the FMBN is adopting several measures to ensure that more citizens have access to home ownership loans.

The NHF scheme was established in 1992 to address the constraints to the mobilisation of long-term funds for housing finance and ensure that every Nigerian has access to housing loans at affordable interest rates through participation and contribution to the Fund.

Its overall objective is to provide a cheap source of loanable funds to nurture and sustain the mortgage industry and eventually facilitate affordable home ownership for the low and medium income groups in the country.

The FMBN, in a statement issued by its Head of Corporate Affairs, Lawal Isa, said the challenges of housing finance in the country had limited the number of contributors to the NHF who had benefitted from the scheme. “As a result, although there are currently about four million Nigerians that are registered and are contributing to the Fund, the FMBN has been able to provide mortgage loans to only about 60,000 contributors.This seemingly dismal number has created a negative image for the bank as the public perceive the bank as not having effectively delivered on its mandate.”

The statement noted that Section 14(2) of the NHF Act Cap N45 of 1992 stipulated that a contributor to the Fund could access a loan from the NHF for the purpose of building, purchasing or renovating existing homes/houses.

To achieve this, the bank stated that it had developed concessionary loan windows to enable Nigerians to access mortgages for home ownership.

“However, the realisation of this objective has been hampered by several challenges to housing finance in Nigeria, which include, among others, lack of access to land; inadequate funding for the housing sector; inaccessibility of mortgage loans due to lack of proper titles to properties; low income of prospective borrowers, which affects affordability; and cumbersome procedures for obtaining governor’s consent to land transactions, which is also costly.

“It has, therefore, become necessary for the FMBN to develop some quick-wins that will allow a greater number of Nigerians access to the National Housing Fund.”

The bank added that it had to come up with a Home Renovation Loan initiative that would afford Nigerians an opportunity to access mortgage loans for the renovation or improvement of their existing homes.

It, however, explained that the scheme was specifically designed for Nigerians who were contributors to the NHF.

Dike Onwuamaeze

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