Here’s how FMBN’S new ap­proach to mort­gage is chang­ing hous­ing fund story

Business Day (Nigeria) - - PROPERTY & LIFESTYLE - CHUKA UROKO

When the Na­tional Hous­ing Fund (NHF) scheme was set up by an Act Act of Par­lia­ment—act No 3 of 1992, it came as a child of ne­ces­sity, serv­ing as a pool of long-term funds and so­lu­tion to the poor fund­ing struc­ture of the Nige­rian hous­ing fi­nance sys­tem.

As a hous­ing fi­nance so­lu­tion, the fund ad­dresses ma­jor chal­lenges of cost and tenor of funds. Though it was set up pri­mar­ily for mort­gage lend­ing, the fund has evolved, over the years, to pro­vide other forms of Hous­ing Fi­nance based on cus­tomer/mar­ket needs such as con­struc­tion fi­nanc­ing, hous­ing mi­cro-fi­nanc­ing, rent to own­er­ship, etc.

By law, the fed­eral mort­gage bank of Nige­ria (FMBN), which is the apex mort­gage bank in the coun­try, is em­pow­ered to col­lect, man­age and ad­min­is­ter the NHF scheme.

Not un­til 3 years ago, the 28-year old scheme had re­mained a fledg­ling with un­der­per­for­mance in al­most all its key performanc­e in­di­ca­tors.

But there had been chal­lenges bor­der­ing on non-com­pli­ance by in­sti­tu­tional in­vestors such as banks and in­sur­ance com­pa­nies, work­ers cov­er­age such that only five mil­lion are reg­is­tered out of 90 mil­lion na­tional work­ing pop­u­la­tion.

How­ever, the rel­a­tively new man­age­ment at FMBN has in­tro­duced new in­no­va­tions in the op­er­a­tions of the fund that are not only ad­dress­ing the fund’s legacy chal­lenges, but also chang­ing its story.

“On as­sump­tion of of­fice in 2017, we pre­sented a pro­posal to Cen­tral Bank of Nige­ria (CBN) for con­sid­er­a­tion by Bankers’ Com­mit­tee for riskbased in­vest­ment in NHF,” Ahmed Dangiwa, FMBN’S man­ag­ing di­rec­tor and chief ex­ec­u­tive said at an in­ter­na­tional hous­ing show in Abuja re­cently.

Dangiwa dis­closed that there are on-go­ing ef­forts to re­view the NHF & FMBN Acts, adding that the apex mort­gage bank was part of an ad­vo­cacy for states’ adop­tion of Model Mort­gage and Fore­clo­sure Law (MMFL).

“We are part of an ad­vo­cacy for re­duc­tion in prop­erty trans­ac­tion costs; we have cre­ated an In­ter­nal Records Of­fice (IRO) to bridge de­lays in mort­gage orig­i­na­tion; we have au­to­mated our busi­ness pro­cesses and also im­proved our op­er­a­tional turn­around time,” the CEO said.

Be­sides the in­tro­duc­tion of new in­no­va­tive prod­ucts to match var­i­ous hous­ing fi­nance needs, FMBN has also in­creased NHF mo­bil­i­sa­tion and sen­si­ti­sa­tion to a point where 29 states of the fed­er­a­tion have now keyed into the scheme.

Dangiwa said they have also in­tro­duced a Help Desk and IT plat­forms for cus­tomer re­la­tions; hooked on to a wider print and elec­tronic me­dia chan­nels to pro­vide in­for­ma­tion on their op­er­a­tions/

“We have also em­braced back­ward in­te­gra­tion into fi­nanc­ing of hous­ing con­struc­tion to de­velop the pri­mary mort­gage mar­ket, and we are de­ter­mined to de­liver, at least, one hous­ing estate in 36 states of the fed­er­a­tion and the fed­eral cap­i­tal ter­ri­tory, Abuja,” he in­formed.

The re­sult of these ef­forts, the man­ag­ing di­rec­tor stressed, is the im­prove­ment in op­er­a­tional performanc­e which the fund has seen in the last three years.

Dangiwa noted that the hous­ing fund has recorded sig­nif­i­cant progress over the past three years, point­ing out that, among other things, it has in­creased the num­ber of con­tribut­ing states by 17 per­cent to 29, up from five it was be­fore 2017, giv­ing a to­tal of 34 states that have joined the scheme.

The num­ber of reg­is­tered con­trib­u­tors has also in­creased from 4,539,084 in April 2017 to 5,060,967, mean­ing that be­tween April 2017 and May 2020, 521,883 new con­trib­u­tors joined the scheme, show­ing a 12 per­cent in­crease in just three years.

Sim­i­larly, NHF col­lec­tion grew by 69 per­cent to N392.6 bil­lion, up from N232.8 bil­lion as at April 2017, mean­ing that ad­di­tional col­lec­tion of N159.70 bil­lion was made be­tween April 2017 and May 2020.

From 1992 to April 2017, the scheme re­funded con­trib­u­tors a to­tal of N10.83 bil­lion while N23.924 bil­lion was re­funded be­tween April 2017 and May 2020, show­ing about 221 per­cent in­crease.

Ben­e­fi­cia­ries of the re­fund say it is a new dawn in the apex mort­gage bank. Ya­haya Ajala Umar of the Fed­eral Min­istry of Labour and Em­ploy­ment, Abuja is one of the lucky con­trib­u­tors. Oth­ers are Ab­dul­lahi Kaoje Mo­hammed of Fed­eral Min­istry of In­dus­try, Trade and In­vest­ment, Abuja, and Su­laiman Ya­haya of Sir Ya­haya Memo­rial Hospi­tal, Birnin Kebbi, Kebbi State.

“This is the first time con­trib­u­tors are get­ting a re­fund with­out much stress and we thank Ar­chi­tect Dangiwa and his team for the good work they are do­ing,” Umar said, hop­ing that this would con­tinue to be the norm go­ing for­ward.

In 25 years, the fund dis­bursed to con­trib­u­tors N52.453 bil­lion while in three years it dis­bursed N98.274 bil­lion, show­ing 64 per­cent in­crease that gave a to­tal dis­burse­ment of N250.721 bil­lion in 28 years.

Based on these im­prove­ments in its performanc­e in­di­ca­tors, Dangiwa noted that they were look­ing at the fu­ture of the fund with op­ti­mism and are, there­fore, en­cour­aged to in­tro­duce new prod­ucts plan for Di­as­pora mort­gage loan and fi­nance stu­dent hos­tel con­struc­tion.

“NHF op­por­tu­ni­ties to fi­nance hous­ing fi­nance in Nige­ria are end­less; with com­pli­ance by in­sti­tu­tional in­vestors, full cov­er­age of the lo­cal work­ing pop­u­la­tion and in­te­gra­tion of the Di­as­pora mar­ket, an­nual col­lec­tion can to­tal over N400 bil­lion,” he said, adding that this sum could de­liver over 53,000 new homes per an­num , and also give over 800,000 hous­ing mi­cro-fi­nance loans

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