Efforts by the Federal Mortgage Bank of Nigeria (FMBN) to raise its capital base from the current N5 billion to N500 billion on Wednesday received a boost from Senate.
Some of the ways being adopted to achieve this include kicks-starting project funding through the capital market and the creation of debt instruments to attract investments from the National Pension Commission (PENCOM).
This was made known by Richard Esin, the acting managing director/CEO of FMBN, when the Senate committee on lands, housing and urban development, led by its chairman, Barnabas Gemade, visited the bank as part of its oversight function towards ensuring that the bank operates within its mandate in of facilitating mortgage financing for Nigerian workers.
During the parliamentarians’ visit, Esin solicited their intervention in engaging the CBN and other shareholders to meet their obligatory equity contribution to the bank and also implement the upward review of the FMBN’s capital base to N500 billion as endorsed by the National Council of Housing at its last meeting.
Gemade, in his response, acknowledged that the capital base of the bank was broad and solid enough, considering its role in the development of the entire Nigerian housing sector, and regretted the inability of core shareholders to meet their equity obligation to the bank.
The committee then resolved to give the FMBN adequate parliamentary assistance towards meeting its mandate of providing affordable housing for Nigerians, adding that the National Housing Fund (NHF) Act may need to be reviewed to reflect today’s present economic realities.
The committee commended the present Management of FMBN for its efforts towards revolutionizing the bank’s operations, as well as instilling confidence in the minds of stakeholders and Nigerians who are desirous of doing business with the bank.
Another area in which the parliamentarians’ support was solicited by the FMBN boss was the review of the legal and regulatory framework of the bank, particularly the enactment of a foreclosure law to support the Nigerian mortgage subsector to achieve relative stability.
He elaborated on ongoing steps taken by the bank to reinvent itself, which he said were based on four pillars of corporate governance compliance, operational effectiveness, bank profitability, and debt recovery.
The FMBN helmsman said such initiatives would ensure that the bank assumed a more definitive role in meeting its stakeholders’ needs of affordable housing provision to Nigerians in a profitable and sustainable way.
Esin said that the bank was also focusing its business on mass housing provision for the middle income market segment, with the construction of houses that would be sold at an average price of N5 million per unit.
In order to efficiently drive this system, he explained that the automation of its processes, particularly those of the National Housing Fund, was on-going, and that strategic collaborations were under consideration with Galaxy Backbone, NIBSS and Microsoft for the same purpose.
Esin also disclosed that his recent visit to the Economic and Financial Crimes Commission (EFCC) was a strategic move towards debt recovery through the anti-graft agency, adding that it was yielding positive results as some debts were being repaid.
He highlighted the completion of abandoned funded estates and upgrade of information technology/information systems in the bank as priorities, while assuring the senate committee of the bank’s readiness to widen the Nigerian mortgage space through the development of a viable secondary mortgage market.
