The Federal Mortgage Bank of Nigeria (FMBN) does not have a strong capital base and this is affecting it’s ability to provide the low-cost housing in Nigeria. The mortgage bank reportedly has low capital base that is depriving Nigerian workers of affordable housing units, thereby, exposing them to high-end property within the country.
FMBN’s Managing Director, Ahmed Dangiwa, said government’s intervention was needed to raise the bank’s capital base from N5 billion to N500 billion so that it would be appealing to local and international investors.
According to Dangiwa, out of the bank’s present capitalisation of N5 billion, only N2.56 billion was fully paid up. He said the mortgage bank would be in a better position to request for more funds for affordable homes from the private sector, capital market and international development agencies if FMBN’s capital base was strong.
Application processing timeframe cut: In a bid to reduce housing deficit and applications received for the National Housing Fund scheme, the Managing Director disclosed that in two years, a total of N75.5 billion was disbursed for 3,541 mortgages and 25,242 home renovation loans.
Dangiwa said the bank had been able to drastically reduce the number of applications pending as its processing speed had increased by 45%. He disclosed that the processing time for NHF scheme used to be two years, but in recent years, the management had been able to cut the timeframe down to four months.
FMBN not there yet: However, in spite of the improvement in response time, the FMBN boss said the Mortage bank wasn’t at the level it should be.
“We have recorded improvements in the turnaround time of the NHF loan applications. While before now it used to take an average of two years to process an NHF loan, we have been able to bring this down to four months.
“Of course, we are still not where we want to be, but at least we are now moving in the right direction and intend to do more,” Dangiwa said while calling for improvement from primary mortgage banks in their application process for NHF mortgage loans.