FMBN: Marching Towards Affordable Housing Through Collaboration And Accountability
Under the watch of its new managing director, Arc Ahmed Musa Dangiwa, the Federal Mortgage Bank of Nigeria (FMBN) is on a steady match towards bridging the huge housing deficit in the country.
The World Bank estimated that Nigeria has a housing deficit of about 17 million units. But at a time optimism is in short supply in virtually all sectors, the FMBN is giving contributors to the National Housing Fund reasons for hope. The new management is pulling off some remarkable feat particularly with its promotion of the following innovative reforms: Business Process Automation: The FMBN has embraced technologies aimed at achieving end-to-end business process automation within the institution. Its adoption of core banking application, wide area networking and mobile and internet solutions, will allow the Bank to seamlessly link with primary mortgage banks and interface with customers. Corporate Governance Framework: The Bank has engaged the Centre for Corporate Governance, which is affiliated to the Institute of Directors (IoD) to carry out Corporate Governance Audit and develop a Corporate Governance Framework and Governance structure in line with international best practices. Enterprise Risk Management Framework: The FMBN is presently implementing an Enterprise Risk Management Framework project undertaken by PricewaterhouseCoopers (PwC) Limited and which is due for completion by Q2 2018. Improvement In Loan Portfolio Performance: The institution has embarked on aggressive loan recovery that has, in turn, improved its loan portfolio performance.
By engaging debt collectors and working with the Nigeria Inter-Bank Settlement System (NIBSS) and PMBs, the Bank is automating loan repayment debits from customers’ bank accounts, which will reduce the rate of loan defaults. Advocacy For Legal/Regulatory Framework Reviews*: As part of its on-going reforms, the bank has worked with government and private institutions like the Central Bank of Nigeria (CBN), the Real Estate Developers Association of Nigeria (REDAN) and the Nigeria Mortgage Refinance Company (NMRC) on advocacy with State Governments to enact mortgage friendly (foreclosure) laws and improve land registry practices.
The Rendition Of Outstanding Financial Statements: To ensure accountability and regulatory compliance in FMBN, the new executive management team of the Bank has taken crucial steps to ensure the rendering of all outstanding financial statements by end of 2018. The new management of the FMBN has continued to ensure transparency in the NHF with SMS and email alerts now being introduced. Mr Dangiwa, in a newspaper interview, said: “Our vision is to reposition the bank as a foremost apex mortgage bank in the country and provide affordable housing financing for contributors to be achieved through improved and transparent operations. All of these are achievable with the cooperation and collaboration of stakeholders. This is our primary aim and focus”. NHF Refund: Documents obtained from the FMBN show that between April 2017 and January 2018, the new Executive Management Team of the Bank has refunded N5, 568, 252, 279.88 to 38, 255 contributors of the National Housing Scheme.
This indicates a 31.4 per cent increase in NHF refunds from a cumulative repayment of N17, 734, 599, 814.76 to a total of 190, 943 contributors since inception of the window in 2015. Also, the usually long period taken to process NHF Refunds has been shortened by the FMBN new management. NHF Mortgage Loans (NHFL): Figures obtained from the FMBN show that the Bank has equally disbursed N7.97 billion as NHF mortgage loans to 1, 019 beneficiaries between April 2017 and January 2018. FMBN Home Renovation Loan: Disbursements totalling N5.06 billion were made as home renovation loan to a total of 6, 718 beneficiaries under the aforesaid period. Our source further gathered that the FMBN, as of January 2018, has cleared backlogs of outstanding accounts up to 2014. The audited accounts are said to be pending approval of Central Bank of Nigeria (CBN) and the Honourable Minister of Power, Works and Housing. The 2015 audit exercise has equally been concluded and FMBN is awaiting the draft copy.
The 2016 and 2017 outstanding accounts will be concluded before the end of 2018. The FMBN, incorporated as the Federal Mortgage Bank of Nigeria in 1956, is the sole government institution saddled with the task of providing mortgage finance to Nigerians through the National Housing Fund (NHF). Previously known as the Nigerian Building Society, the FMBN is tasked with the provision of long-term facilities to mortgage institutions, mobilisation of both domestic and offshore funds into the housing sector, collection and administration of the National Housing Fund in the country in accordance with the provisions of the NHF Act. The FMBN has carefully designed the NHF to mobilise funds to provide the citizens with affordable residential houses through accredited Primary Mortgage Banks (PMBs) at six per cent which is the lowest rate in the country. Tasks Ahead Of The FMBN Even though the FMBN has faced a couple of operational challenges over the years, the institution has continued to ensure increased accountability in the management of the National Housing Fund. The FMBN has taken thoughtful steps to re-integrate defaulting states like Niger, Bauchi, Kebbi, Lagos, Kano, Ondo, Edo and Oyo into the NHF scheme in order to improve its performance indices. “We are currently reaching out to these states to see if we can bring them back on board to the NHF scheme…Mostly, we always tell them the advantages of joining the scheme because of the numerous products they can access and enjoy. – Olu wrote in from Abuja