FMBN Engages PenCom to Expand Access to Mortgage for Workers

Nigerian workers who are contributors to the national contributory pension scheme may soon be able to use part of their contribution to pay for equity contribution in the National Housing Scheme (NHS), the Managing Director of the Federal Mortgage Bank of Nigeria (FMBN), Mr. Ahmed Musa Dangiwa, has disclosed.

Dangiwa, stated this in his presentation as a guest speaker at the recent 2018 edition of the annual ‘Archibuilt’ conference and exhibition organised by the Nigerian Institute of Architect (NIA) in Abuja.

He explained the FMBN discovered it was difficult for most Nigerian workers to come up with equity contributions whenever they filed for housing mortgage with it and has in this regard began consultations with the Pension Commission (PenCom) on possibilities of allowing contributors to the pension scheme use parts of their pension to pay for mortgage equity.

As at June 2018, the PenCom indicated the contributory pension fund had hit N8.23 trillion.

Dangiwa, however identified the lack of access to finance amongst applicants for the NHS as one of the major challenges to home ownership in Nigeria.

He indicated the pension fund could come in handy in this regard for civil servants.

“We found that request for equity contribution is a big problem to civil servants. We are in collaboration with pension fund to see whether a person can access his pension fund to pay for the equity contribution, even though we’ve reviewed the equity down to 10 per cent,” he said.

At the conference, the president of NIA, Mr. Atibe Njoku, lamented that houses with resourceful architectural designs are now considered proceeds of financial corrupt practices in Nigeria.

Further, Dangiwa, explained that the contributions of Nigeria’s housing sector to the Gross Domestic Product (GDP) was still low, while there were still a lot of hurdles to be cleared before the sector can grow in its GDP contributions.

“Contribution of the housing sector to the GDP is insignificant with its potential mainly untapped. The sector contributes only eight per cent to the GDP with the housing deficit estimated to be about 17 million.

“The impacts of housing developments to national development is numerous and potentials embedded in housing as bedrock to national development is boundless.

“In developing countries, housing sectors contribute highly to the GDP and this directly reflects the level of jobs in the economy. The investment in housing in Nigeria is very low,” Dangiwa stated.

According to him, “Construction of a two or three bedroom bungalow is capable of directly creating employment for an average of 76 workers and this number goes up significantly in indirect employment and this helps in economic inclusion.”

Speaking more on the challenges, he noted, “The most critical challenges of housing provision in Nigeria is financing, particularly the mortgage finance. Long term housing and mortgage finance has constituted a challenge over time.