The federal government plans to inject N500 billion into Federal Mortgage Bank of Nigeria (FMBN) putting in N100 billion annually over the next five years as part of efforts to address the housing deficit of the country.
Chief executive officer of FMBN, Ahmed Musa Dangiwa, said the mortgage bank was expecting proposals on its recapitalisation, as well as a reorganisation of its business, to be approved by all arms of government by the end of 2018.
With a housing deficit of 17 million units, Nigeria is seeking to improve access to home loans in an economy that vies with South Africa as the continent’s biggest.
A lack of proper land deeds, poverty and record high interest rates means there are only an estimated 50,000 registered mortgages, of which FMBN accounts for 18,200.
Noting that the company’s current capital base was grossly inadequate, Dangiwa said “that is why we are in the process of ensuring that the capital base be increased.”
With the increased capital, he said the bank could go from the 2,500 new mortgages it plans to sign up this year to 100,000 over the next two years, adding that the extra capital would also encourage other investors to provide additional funding.
In August, the FMBN will flag off a 1,500 housing project it is providing funding for under a new “rent-to-own” program that Dangiwa said would help create more mortgages and access to housing.
In South Africa, the continent’s most-industrialised economy with a population of about 55 million, mortgages account for almost 30 per cent of total credit, the largest component of banks’ assets, which amounted to about 5.14 trillion rand at the end of January, according to central bank data. Nigeria has a population of about 200 million.
Nigeria Mortgage Refinance Co., the nation’s state-backed mortgage guarantor, which provides loans to banks, plans to issue N11 billion worth of 15-year bonds through multiple sales as part of a five-year N440 billion program, NMRC chief executive officer, Charles Inyangete said in a March interview.
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