More home owners on the way as FMBN gives out N30.5bn housing loans in 2020

There is expectation that, starting from this New Year, more Nigerians will be leaving the housing market as the federal mortgage bank of Nigeria (FMBN) gave out N30.5 billion housing loan in 2020.

The loans, which were given across the bank’s portfolio of affordable housing products amid the ravaging impact of Coronavirus pandemic, brought to N118billion, the cumulative loan the bank has deployed towards affordable housing delivery since its current board and executive management team took office about four years ago.

The bank also gave out home renovation loan in 2020 and, according to its officials, about N13billion was given to over 16,006 beneficiaries nationwide, bringing the total to 55,464 beneficiaries of such loan since 2017.The bank gives up to N1million at a single digit interest rate of 6 percent and a payment tenor of five years.

The loans which were given to National Housing Fund (NHF) subscribers is expected to raise the economic and social status of the beneficiaries, create jobs and reduce pressure on their lean pockets as well as help those who already have homes that are not in decent condition.

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Also, in 2020, FMBN provided NHF mortgage loans totaling N8.9 billion to over 854 beneficiaries. Record shows that, since April 2017, the bank has disbursed a total of N38.3 billion and created over 4,603 affordable mortgage loans for NHF subscribers, representing 54 percent increase from the N71 billion that the bank posted between 1992 and April 2017 – a 25-year period.

“This remarkable increase in the number of NHF Mortgage loans bodes well for the future of affordable housing delivery in Nigeria because of its unique structuring to serve Nigerian workers within the low- and medium-income bracket,” noted John Ikyaave, an Abuja-based housing policy analyst.

Ikyaave explained that FMBN’S NHF mortgage loan offers up to N15 million at 6 percent interest rate per annum with payment tenors of up to 30-years. Loans below N5million attract zero equity down payment while those above N5 million to N15 million require 10 percent equity. Subscribers are qualified to apply for the mortgage loan after only six months of continuous contributions to the scheme.

FMBN also recorded a substantial progress in housing stock construction in 2020. The bank deployed about N13.6billion towards the construction of 786 affordable housing units, bringing the cumulative under the current management to 9,136 housing units.

“The speedy completion of housing projects marks a break from the era of abandoned projects experienced in the past,” Ikyaave noted, adding that another major high point of FMBN achievements in 2020 was its bid to modernize its operations to meet global banking standards.

On December 3, 2020, he recalled, Babatunde Fashola, the Minister of Works & Housing, announced the approval by the Federal Executive Council (FEC) for the FMBN to procure and deploy a Core Banking Software Application.

It is hoped that, once operational, the application would help the FMBN to tackle the many systemic challenges that it has had to contend with over the years due to the largely manual nature of its operations.

The App is expected to fix the longstanding inability of the bank to update, in realtime, subscribers’ monthly contributions to NHF scheme by ensuring that subscribers get real time alerts on all transactions on their NHF

Accounts and stay informed on the status of their accounts.

The system would also help to reduce the time it takes for subscribers to access home loans from the bank from over twelve months to about a month, and help FMBN to achieve efficient document management systems by enabling it work paperless in loan documentation, appraisal, disbursement, remediation, and loan recovery processes.

“On the whole, the focused and result-driven management approach of FMBN in 2020 helped the bank to successfully manage the challenges that the year posed to its operations”, Ikyaave said,

He reasoned that the remarkable performance fo the bank in 2020 underscored the spirit of reform that has animated it in recent years under the leadership of Ahmed Dangiwa. “This inspires hope for the future of affordable housing delivery in Nigeria and deserves the support of all stakeholders,” he said.