FMBN plans cheap loan window to close 17m housing deficit

By Abimbola Johnson

FROM 1956 when it started as the Nigerian Building Society until 1977 when it transformed to the Federal Mortgage Bank of Nigeria or the promulgation of the Mortgage In­stitutions Act (1989) and the FMBN Act 82 (1993), in 1994, when the FMBN was accorded the status of the apex mortgage institution in the country, Nigeria’s housing deficit has never been more daunting than now.

Unlike many other countries with similar challenges, an esti­mated 80percent (or over 130 mil­lion) of Nigerians live in indecent, informal housing structures with no basic amenities and in deplorable conditions. Only few own the house that they live in. The housing deficit of Nigeria, according to the World Bank, is estimated at a whopping 17 million units. In densely populated commercial and urban centres like Lagos, Abuja, Port Harcourt and Kano, squatters outnumber those decently accommodated. The same World Bank, puts the cost of the 17 million housing deficit at about N59.5trillion. Yet another informed stakeholder: a two-time member of the House of Representatives, who was also Minister of Sports and now President of the Association of Professional Bodies in Nigeria, Bala Ka’oje only last Monday, tasked the Muhammadu Buhari administra­tion to make available to the FMBN a bailout fund of N100bn (one hun­dred billion naira) as well as “over­haul and restructure the Federal Mortgage Bank of Nigeria (FMBN) for effective housing delivery”.

Already the restructuring of FMBN is on-going and the new team headed by its Managing Direc­tor, Mr. Richard Esin is not leaving any stone unturned. If snippets from the team’s activities are anything to go by, it seems the burden on the su­pervising Minister for Hosuing, Mr. Babatunde Raji Fashola, would be less in the way they are strategically addressing the challenges of hous­ing deficit inherited by this admin­istration.

While it cannot be denied that funding is a major challenge of the housing sector, it requires leader­ship, the right policy and its effec­tive implementation, as well and sincere and efficient deployment of resources to bridge the housing defi­cit in the country.

There is no gainsaying that the provision of housing transcends the mere provision of shelter. It fa­cilitates urban development and at the same time promotes the socio-economic well-being of a people es­pecially when tailored towards the attainment of home ownership.

Shelter is not only a basic need of life, housing is the right of every woman, man, youth and child to ac­quire and a desideratum for sustain­ing a secure home, family life and community and to live in peace and dignity. The right to housing is codi­fied as a human right in the Univer­sal Declaration of Human Rights:

“Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.” (Article 25(1))

Affordable housing is housing for which the associated financial costs are at a level that does not threaten other basic needs. States should therefore take steps to ensure that housing costs are proportionate to overall income levels, establish sub­sidies for those unable to acquire affordable housing, and protect ten­ants against unreasonable rent in­creases. Nigeria is a peculiar country where mortgage finance (as a share of GDP) is extremely low. At a paltry 0.5 per cent, compared with 80 per cent (UK), 77 per cent (USA), 31 per cent (South Africa) and 2 per cent (Ghana), it is a huge joke. The hous­ing and construction sector account for only 3.1 per cent of Nigeria’s re­based GDP. Housing production is at approximately 100,000 units per year while 800,000 units are needed yearly.

As a result of this lack of a robust mortgage financing system, Nige­ria’s rate of home ownership is one of the lowest in Africa at 25 per cent. Statistics show that Nigeria’s home­ownership rate is much lower than countries like Singapore (90 per cent), Indonesia (84 per cent), Ke­nya (73 per cent), USA (70 per cent), Benin Republic (63 per cent) and South Africa (56 per cent).

In addition to these obstacles to home ownership, Nigerians face daily battles with poverty, unem­ployment, low human development index (HDI), low access to clean wa­ter and improved sanitation and in­cessant power outages. A large per­centage of Nigerians are unbanked as only about 40% of the adult population is financially included. One is therefore gratified about the current restructuring of the FMBN, embarked upon in that sector by Buhari when he brought in Mr. Richard Esin. A man of few words, he has accepted the responsibil­ity to deliver on the mandate of the bank and carry forward the modest achievements of his predecessors.

A snapshot into his four months’ stewardship can be gleaned from his account at the ongoing 15th Lagos Housing Fair. Speaking through Mr. Yusuf Yinusa, the Lagos Zonal Co­ordinator of the bank, he reported how the National Housing Fund, NHF, has hit N191.9billion in March from 4.14 million registered contrib­utors under scheme.

Esin also said that N5.9billion had been refunded to 118,284 individu­als who met conditions for refund, while over 70 per cent of the cumu­lative collection was recorded in the last five years.

Section 14(2) of the NHF Act of 1992 stipulates that a contributor to the NHF can access a loan from the fund for the purpose of building, purchasing or renovation of existing homes /houses. If this is made truly compassionate, with security and opportunity at its heart, the nation will be inching towards affordable shelter. As Nigerians look forward to the concessionary loan windows promised by Esin to enable them ac­cess mortgages for home ownership at affordable interest rates, it is laud­able that the NHF managed by the bank has financed the construction of about 25,606 housing units and advanced 16,506 mortgage loans.

While disbursements are pend­ing, according to the Acting MD, for the delivery of additional 15,085 housing units and 10,726 mortgage loans, the bank has already entered into partnership with the Federal Housing Authority (FHA); Assets Management Company of Nigeria (AMCON) and state governments to ensure that the challenges of lack of access to land, inadequate funding for the housing sector, inac­cessibility of mortgage loans due to lack of proper title to properties, low income of prospective borrowers which affects affordability, cumber­some procedures for obtaining gov­ernors’ consent to land transactions which is also costly, are addressed.



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FUTO GBEDU: Whispering into your Ears | Admission lists | Certification Examinations: FMBN plans cheap loan window to close 17m housing deficit
FMBN plans cheap loan window to close 17m housing deficit
FUTO GBEDU: Whispering into your Ears | Admission lists | Certification Examinations
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