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FMBN: Making housing affordable for Nigerians

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Ahmed Dangiwa, Managing Director of the Federal Mortgage Bank of Nigeria (FMBN) and his team deserve to be celebrated as national icons for their passion for excellence. Within two years he took over as the head of a new management, the FMBN has transformed into one of the best performing government establishments in the country.

Between April 2017 and March 2019, the bank disbursed N58bn as housing loans to 23,600 beneficiaries. It was an unprecedented achievement when you compare it with the performance of the bank in previous years. For instance, the FMBN only managed to disburse N152bn during a 24-year period covering 1992 to April 2017.

In a country where housing deficit is said to be around 70 million, FMBN’s achievements in the last two years must be considered insignificant. But when you consider that even such modest performance had proved a tall order in the past, one would readily admit a radical departure from the culture of indolence that had long been associated with the bank.

Whoever imagined that a government establishment could show such innovativeness and drive usually demanded in the private sector where performance are measured by how much of set targets are met. The management of the FMBN under Architect Dangiwa appeared to have come to the job with a dream and the passion to realize it.

Dangiwa could take the credit for offering a purposeful and resourceful leadership, but his team deserves equal praise for buying into the vision to radically transform provision of housing in the country.

In line with its vision to operate a robust secondary mortgage institution able to meet the challenges of developing the nation’s mortgage industry, it had significantly achieved the mission of supplying the mortgage markets with liquidity for the advancement of home ownership among Nigerians.

The management has worked assiduously in the last two years with stakeholders to achieve the current liquidity levels which had undoubtedly impacted the housing markets in the country.

But it is also in the determination to improve service delivery and extend access to affordable housing for more Nigerian workers that the Dangiwa led management has impacted more. Loans disbursement to workers are made different innovative and attractive products such as Home Renovation Loans, Cooperative Development Loans and the National Housing Fund Mortgage Loans among others.

For instance, the N58 billion disbursed in the last two years were shared among the different categories. The amount covered the NHF Mortgage loans to 3,171 Nigerian workers valued at N22.3bn, Home Renovation loans valued at N16.9bn to 20,429 Nigerian workers and Estate Development loans valued at N13.6bn.

The bank also provided N2.7bn as Cooperative Development loans while the sum of N2.5bn was disbursed under the Ministerial Pilot Housing Scheme Project.

In addition to all these, the FMBN also posted a strong performance in the processing of applications for refund of contributions to the NHF by workers who have retired from service. The bank successfully processed 120,759 NHF refund cases and paid out a total of N16.5bn between April 2017 and March 2019.

The amount recorded in terms of NHF refunds in about 24 months exceeds the total of N10.8bn recorded between 1992 and April 2017-a period spanning 25 years. It is a remarkable achievement when you also consider the fact that the FMBN within the same period funded the construction of 6,538 housing units across the country.

It is not a surprise that the Dangiwa led management has been able to do so much within a short time. The Dangiwa team sees itself as a reformist on a rescue mission. It is instructive that Dangiwa had, in an address to staff, reportedly commended them for demonstrating a “determination to justify the confidence of President Muhammadu Buhari in our capacity to reform the FMBN as an effective tool in the hands of government to tackle the lingering housing deficit.”

And as part of strategies to make housing accessible, the FMBN commenced the implementation of the new approved conditions for accessing loans from the NHF. This includes the zero equity contribution for the provision of housing loans of up to N5million and 10 per cent contribution for housing loans ranging from N5million to N15million by contributors to the NHF.

The revised requirements were recently approved by the board of FMBN. They represent a 100 per cent reduction in the equity that contributors to the housing fund were hitherto expected to bring before they could access the loans such as five per cent and 20 per cent for the two housing loan bands of up to N5million and N15million, respectively.

FMBN, which manages the scheme, was established by Act 3 of 1992, to enable Nigerians in all sectors of the economy, particularly those within the low and medium income levels, who cannot afford commercial housing loans, such as civil servants, traders, artisans, and commercial drivers and a host of others to own houses.

The bank provides mortgage loans from the pool of funds available to the NHF at four per cent interest to accredited Primary Mortgage Banks for on-lending at six per cent to NHF contributors over a maximum tenor of 30 years, which is secured by the mortgaged property.

A contributor can access up to N15million from the fund through an accredited PMI as a mortgage loan to build, buy, improve or renovate own home after six months of continuous contributions. These lending conditions make the NHF an unequalled vehicle for affordable housing delivery in Nigeria. The downward revisions represent a key milestone in the new executive management’s drive to ensure that more Nigerian workers can afford decent and quality housing.

It is a groundbreaking feat and a huge win for Nigerian workers and particularly those that contribute to the NHF as it would go a long way towards reducing the financial burden of homeownership that contributors to the fund have been carrying for the past three decades.  The equity contribution have now crashed by over 100 per cent.

Speaking on the feat recently, Dangiwa advised existing contributors to take advantage of the new friendly conditions to secure loans to purchase or build their homes. He also advised those who are not currently registered with the NHF to do so through FMBN offices located in states nationwide so they too can take advantage.

The Dangiwa team deserves all the accolades and support it is getting from all stakeholders in the industry.

-Wale Solomon wrote from Trademore Estate, Lugbe, Abuja.

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