Mortgage bank operators canvass FMBN recapitalization to N500bn
Primary mortgage bank (PMB) operators in Nigeria say the present N5 billion capital base of the Federal Mortgage Bank of Nigeria (FMBN) is too low, canvassing that, as the managing agent of the National Housing Fund (NHF) scheme, the bank should be recapitalized to, at least, N500 billion.
The operators under the aegis of Mortgage Banking Association of Nigeria (MBAN) are also seeking intervention or marching fund from the Central Bank of Nigeria (CBN) by injecting a minimum of N500 billion into the mortgage system at a single digit interest rate to stimulate the development of the system.
MBAN, in a communiqué issued after its 11th annual mortgage banks CEOs in Lagos, explained that the recapitalization of the FMBN was to adequately position the institution to deliver on its mandates as a secondary mortgage institution designed to create long term funding for housing finance for Nigerians.
Concerned about the indebtedness of some companies to FMBN as a result of default on credit facility to such companies as estate development loans (EDL), MBAN said it would align with the apex mortgage bank on its strategic initiatives to recover the outstanding loans, adding that it would also ensure that, going forward, only companies and estate developers with proven track records should have access to the EDL window of the bank.
Though the association applauds the robust customer complaints resolution mechanisms put in place by the Nigeria Deposit Insurance Corporation (NDIC) to protect depositors as well as the consumer protection department of the CBN to protect the general public, it is nonetheless worried that the mortgage sub-sector was not considered in the recent decision to provide intervention/matching funds for certain sub-sectors of the economy.
It sees the current slide in revenue generation to the Federation Account from oil as a blessing in disguise for the country as the mortgage and housing sub-sector has the potential to develop and sustain the economy with its value-add and capability chain to generate huge employment.
It therefore calls on all stakeholders to take advantage of multiplier effects of the sub-sector to extend mortgage finance to the low and middle income groups for their housing reeds which would, in turn, grow the country’s economy.
Worried also by the negative impact of infrastructure, which constitutes about 30 percent of construction cost, on housing and mortgage, MBAN enjoined the federal, states and local governments to strive to provide support for estate developers by stepping up provision of infrastructure across the country to enhance affordable housing.
The association recommends the removal of the Land Use Act of 1978 from the constitution by the National Assembly to make for easier amendments to same as at when deemed fit, noting that the challenges associated with the Act in the area of land title registration are factors inhibiting the growth of the mortgage banking sub-sector.
“We are therefore, re-iterating our call on all state governors to fast-track land title registration processes and reduce cost of perfection of titles so as to encourage more citizens to obtain their land documents which would ultimately enhance the internally generated revenue (IGR) profiles of the various state governments”, Kayode, MBAN’s Executive Secretary/CEO, emphasized.
According to him, the mortgage and housing sub-sector is an energizer and major catalyst in the translation of some hitherto third world countries like Dubai, Taiwan, Singapore etc into first world countries and called for an assembly of professionals in the sub-sector to form a think-tank to proffer plausible solutions that would move it forward.
CHUKA UROKO