Housing Deficit: ‘FMBN’s N2.5bn Capital Base Inadequate, Needs Recapitalisation Urgently’

In its bid to address the massive housing deficit in the country, the Management of the Federal Mortgage Bank of Nigeria, FMBN, has called for the recapitalisation of the Bank.

The managing director/CEO of the FMBN Shehu Usman Osidi made the call while responding to questions from journalists, during a courtesy visit by the secretary general, International Union for Housing Finance, (IUHF) at the headquarters of the Bank in Abuja.

Osidi said FMBN’s capital base of N2.5 billion was not enough to effectively resolve Nigeria’s housing deficit. He reiterated the need for improved government funding to enable the Bank to provide mortgage finances to prospective homeowners as well as finance primary mortgage institutions for loan lending.

“And for us, more particularly, it is about the recapitalisation of the bank. Because if the bank is recapitalised, we can leverage on our capital to raise cheap funding to provide good consortium finance and so on. One of the matters I am trying to remember is the importance of government funding the Federal Mortgage Bank of Nigeria. That might be the only solution to the housing deficit. That is why we have been engaging with the government at the highest level to ensure that this bank is recapitalised”.

“Don’t forget that the Federal Mortgage Bank of Nigeria finances primary Mortgage institutions, but the bank is sitting on a capital base of just N2.5 billion.

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Even the primary Mortgage banks that we are funding have more capital than we do have. This is greatly impeding on the capacity of the bank to provide mortgages or make attempts to fill the housing deficit that we have in this country. So, recapitalisation is very important”, he said.

In his remarks the secretary general of IUHF, Germany, Mark Weinrich said if the FMBN uses the right concept, it would bring a positive change to the nation’s housing sector and resolve its deficit.

“And I believe if we have the right concept, we can make a real difference. You just have to adapt to the Nigerian environment. I’m not here to give you a blueprint which works everywhere, but you have so many innovations here already in the country. I mean, Africa is the future and not Europe. Because we are old and getting lazy. That’s the truth”.

“I believe that you have so much you can do on your own if you just believe in yourselves and if you embrace the innovations, if you embrace the change and embrace the possibilities. So, if you have questions, I’m happy to answer them. Also, if I’m at home again, I can lay out the model in more detail”, Weinrich said.