By Zubaida Umar
The Federal Mortgage Bank of Nigeria (FMBN) has delivered record-breaking achievements in the past four years as a vital institutional tool of the President Muhammadu Buhari Administration in the delivery of affordable housing to Nigerians nationwide.
The achievements are a result of Mr. President’s clear vision for the development of the Nigerian housing sector, apparent by his appointment of a competent and reform-minded Board of Directors and Executive Management Team for FMBN under the leaderships of Dr. Adewale A. Adeeyo, OON and Arc. Ahmed M. Dangiwa, fnia, ficen respectively.
It is noteworthy that the Bank’s historic strides in the past four years (2015-2019) have found direction under the Buhari Administration’s broad agenda, which is in tandem with its corporate mandate to, amongst others, advance affordable home ownership through the supply of sustainable long-term liquidity to the Nigerian mortgage market; promote a viable primary and secondary mortgage market and; the management of the National Housing Fund (NHF) – a contributory savings scheme designed to mobilize long-term funds from Nigerian workers, banks, insurance companies and the Federal Government to advance concessionary loans to NHF contributors.
Across all corporate performance indicators, including loan disbursements, delivery of housing stock, funds mobilization, available loan products, mobilization of new contributors to the NHF scheme, and the refund of NHF contributions, the Bank surpassed previous records of achievements. Some of the significant areas of performance improvement are highlighted below.
N147.3 billion Mortgage Loan Disbursement
Under the four years of the Buhari Administration, FMBN
disbursed the total sum of N147.3
billion for affordable housing finance through the National Housing Fund (NHF)
Scheme. This comprises
- Estate Development Loans totalling
N66.3 billion for the construction of 1,726 housing units; - NHF Mortgage Loans totalling
N36.6 billion granted to 5,030 beneficiaries; - Home Renovation Loans totalling
N22.7 billion granted to 27,618 beneficiaries; and - Ministerial Pilot Housing
Scheme loanstotalling
N21.7 billion for the construction of 1,619 housing units.
Remarkably, the total loan disbursement of N147 billion between 2015 and 2019 represents over 70% of total loan portfolio of N210.6 billion advanced by the Bank since
commencement of the NHF Scheme 24 years ago. This translates to an annual
average of N36.75 billion (or more than
600% increase) during the Buhari years compared to an annual average of just N6 billion in previous years.
Refund of NHF Contributions to Retirees
In a move that marks a radical departure
from the perennial problem of delayed refund of NHF contributions to retirees, in
the last four years, FMBN recorded over N23
billion as pay-out of NHF contributions to 181,436 qualified contributors. This
accounts for 70% of cases of the cumulative number of 257,396 refund applications successfully processed and 82%
of the cumulative sum of N28 billion
refunded since the NHF scheme was established.
The significant improvement in the rate of NHF refund arose from the review of the Bank’s internal processes and Management’s commitment to improved efficiency in service delivery to Nigerian workers who are its customers.
Easing Access and Affordability for NHF Loan Products
In an historic move aimed at breaking longstanding financial barriers to homeownership by low- and medium-income earners in Nigeria, the FMBN reduced the equity requirement for NHF contributors wishing to access NHF mortgage loans. With effect from 2018, the following are the more affordable and accessible equity requirements for NHF mortgage loans:
- Mortgage loans of
N5 million and under attract zero (0%) equity contribution, a downward review from the 10% previously required as loan down payment; and - Mortgage loans of over
N5 million to the maximum amount ofN15million now attract a flat equity contribution rate of 10%, down from the 20% and 30% previously mandatory to access the loan facility.
The drastic downward review of equity
requirement for accessing the NHF mortgage loan has made it more accessible and
affordable to Nigerian workers within the low- and medium-income brackets. The
implication now is that workers who contribute to the National Housing Fund
(NHF) consistently and are up-to-date are eligible for up to a N5 million loan without having to put down
a single kobo as equity, while those seeking for loans above N5 million to N15 million will only put down 10% as equity.
Introduction of FMBN’s‘Rent-to-Own’ Homeownership Scheme
Still in a strategic effort designed to make homeownership more accessible and affordable for Nigerian workers, the FMBN recently introduced the ‘Rent-to-Own’Homeownership Scheme. The scheme offers an easy and convenient payment arrangement towards homeownership for Nigerian workers. It makes it possible for a Nigerian worker to instantly move into an FMBN-owned housing property as a tenant and conveniently pay towards ownership of the property in monthly or annual instalments over as long as 30 years at an interest rate of just 9%!
According to Arc. Ahmed Dangiwa, the Managing Director/Chief Executive of FMBN, “the rent-to-own housing product is designed to make sure that any worker who collects a salary should be able to live in his own home and pay conveniently over periods as long as 30-years. This is a massive relief, especially given how little workers earn.”
Leveraging on Technology
Another notable achievement of the FMBN during the first tenure of the Buhari Administration is the launch of FMBN Digital Platforms. The Digital Platforms have ushered in a new era of transparency and accountability in the operations of the National Housing Fund (NHF) by empowering contributors with real-time access to information on their NHF accounts. Key components of the FMBN Digital Platform Solutions Suite of services include the following:
- The *219# USSD Short Code service via GSM mobile networks
- The NHF Mobile Apps available on android & iOS platforms
- The online Self-Service Kiosk via the Bank’s web portal(www.fmbn.gov.ng/nhfmobile) and
- SMS and email notification services to NHF customers.
The platforms enable contributors to receive instant notifications, check records of NHF contributions on the go, update NHF personal records, check NHF balance of contributions, register and retrieve NHF numbers, request for statements of account, calculate home affordability and mortgage payments, and obtain latest NHF-related information from the FMBN Bulletin Board online service.
The greater transparency, clearer disclosure and convenient access to records of contributions from the comfort of homes and offices or while on the go via personal computers or mobile phones, has boosted confidence in the NHF scheme.
As affirmed by the FMBN Managing Director, Arc. Dangiwa, “on assumption of office, we audited the system and discovered that most employers under-remit deductions, remittance schedules of deductions are not provided, contribution records are not updated or maintained in passbooks and most contributors do not know the status of their contributions. Having critically evaluated the issues, we decided to automate the process to give contributors unfettered access to information pertaining to their contributions and the policies associated with the Scheme for greater efficiency, transparency, accountability and service delivery.”
Implementation of the National Affordable Housing Delivery Programme for Nigerian Workers
In a move aimed at strengthening stakeholder participation and confidence in the operations of the National Housing Fund (NHF), the FMBN in conjunction with the Nigerian Labour Congress (NLC), Trade Union Congress (TUC) and the Nigerian Employers’ Consultative Association (NECA) embarked on the National Affordable Housing Delivery Programme for Nigerian Workers. The Housing Programme aims at a structured and sustainable approach to affordable housing delivery for Nigerian workers nationwide.
About 2,800 housing units are to be delivered in fourteen (14) sites across the six geopolitical zones of the country, in addition to Lagos and Abuja, in batches of a minimum of 200 units per zone. House types include finished semi-detached bungalows as well as 1-, 2- and 3-bedrooms in blocks of flats.
Conclusion
The Buhari Years (2015-2019) represent a period of unprecedented transformation, high-performance and impact at the FMBN in the pursuit of its mandate of deepening access to housing finance, and providing access to affordable housing for low- and medium-income earners. This is a result of the visionary policy direction and strong support the Bank has enjoyed under the Buhari administration.
The stellar results and increased impact of the Bank are helping to change the longstanding narrative from negative to better corporate performance, improved transparency, greater efficiency and service improvement.
As the Buhari administration re-strategizes for a second term in office, the FMBN remains poised to sustain the momentum of reform, high performance and impact, with the objective of driving delivery of affordable housing and promoting the development of a more vibrant mortgage finance market in the country.
Mrs Umar is Group Head, Corporate
Communications, FMBN
