The Managing Director of the Federal Mort- gage Bank of Nigeria (FMBN), Mr Shehu Osidi, has emphasised the need to review the FMBN and National Housing Fund (NHF) Acts to enhance affordable housing financing in Nigeria.
Speaking on Wednesday in Abuja during the anniversary of his one year in office, Osidi stated that the review was essential to addressing challenges in the housing sector and expanding affordable housing options for Nigerians.
According to him, the current Acts contain limitations that restrict the bank’s ability to fully deliver on its mandate.
A review, he noted, would strengthen FMBN’s capacity to achieve its objectives more effectively.
“Our biggest challenge in the FMBN is under capitalisation, because even the primary mortgage banks that we fund are more capitalised than we are.
“The second major challenge is that the NHF Act provides that the commercial banks are to contribute 10 percent of their total output portfolio to the NHF in order to assist in financing affordable housing.
“Insurance companies, by the Act, are also required to contribute 40 per cent of their life loans and 20 per cent of their non-life loans into the NHF scheme to facilitate housing delivery.”
Osidi, however, revealed that since the establishment of FMBN and the provision of its law, neither any commercial bank nor insurance company had complied with the law.
“This challenge and several others are the reasons we have decided to collaborate with the National Assembly to review and amend both the NHF Act and the FMBN Act.
“For example, in our engagements with the central bank that ought to ensure the deductions from the commercial banks; part of the challenge they have also mentioned is that the provision is not implementable.
“This is because the deposits of commercial banks belong to investors and that they cannot on their own choose to invest 10 per cent of the total sum into NHF.”
Osidi stated that in its quest for solutions, the bank engaged extensively with the Central Bank of Nigeria (CBN) and resolved to amend the FMBN Act to include a provision requiring 10 percent of profit after tax from these organisations as a corporate social responsibility contribution.
“This is for them to contribute back to the society from where they are also operating and generating huge profits.”
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