FMBN: Delivering Houses In A Period Of Recession
By Olu Tayo
At a time when public confidence in many government institutions is probably at its lowest ebb, one institution that stands out for its commitment to service is the Federal Mortgage Bank of Nigeria (FMBN). Set up since 1956 when it was known as the Nigerian Building Society, the bank has continued to deliver on its mandate of supplying the mortgage markets with sustainable liquidity for the advancement of home ownership among Nigerians through mortgage financing.
Very few Nigerians are familiar with the mandate of the bank beyond being a mortgage loan institution. But the bank does far more than just lending money to Nigerians to build houses.
The FMBN Act 82  and the Mortgage Institutions Act 53  stipulates among others, that the institution will also provide long-term credit facilities to mortgage institutions in Nigeria; encourage the emergence and growth of viable primary and secondary mortgage institutions to service the need of housing delivery in all parts of Nigeria and mobilize both domestic and offshore funds into the housing sector.
Other functions include linking the capital market with the housing industry, establish and operate a viable secondary mortgage market; collect and administer the National Housing Fund in accordance with the provisions of the NHF Act; and do anything and enter into any transaction which in the opinion of the Board is necessary to ensure the proper performance of its functions under the FMBN Act.
In the second quarter of this year alone, the bank has surpassed all expectations in service delivery. NHF collections for the second quarter alone was N10 billion out of a set target of N11.25 billion, which represents 73.7 per cent of target. The sum of N1.75 billion was paid as NHF Refund for 12.190 beneficiaries while N1.12 billion was disbursed as mortgage loans to 150 mortgagors.
All these were achieved without compromising the integrity of the process as the management ensured a high level of compliance to International Financial Reporting Standard. To enhance the execution of its mandate, the management of the bank initiated a robust stakeholder engagement with such groups as FISH, MBAN, REDAN, NECA, CNN etc
It was not all disbursement as the bank also ensured that loans due were recovered. A total debt of N227million was recovered.
The new Management team is led by Arc. Ahmed Musa Dangiwa who graduated from the prestigious Ahmadu Bello University, Zaria with a B.Sc in Architecture (1985) and an M.Sc in the same field in 1987. He also holds an MBA from the same university, Arc. Ahmed Dangiwa is a consummate, innovative and professional Architect with over 30 years of real estate, infrastructure development, banking and managerial experience spanning private and public practices as well as the academia.
Prior to his appointment as the Managing Director/Chief Executive Officer of the Federal Mortgage Bank of Nigeria, Arc. Dangiwa has been serving since 1996 as the Managing Partner of AM Consults, a leading Architects and Real Estate Development Consulting firm, where he supervised the design and delivery of several outstanding projects in diverse areas and sectors across the country, mainly in the real estate and housing development sector.
Arc. Dangiwa excelled as a mortgage finance practitioner, rising from serving as Property Manager in the Sahel Mortgage Finance Ltd through the position of Manager, Credit Control, to becoming the Head, Mortgage Banking Division of the Institution. He was involved in the design and construction of a wide variety of mortgage and real estate projects that provided housing solutions to a number of stakeholders, especially in the social mass housing end.
Arc. Dangiwa is a professional Architect and mortgage banker. He is a Member of the Nigerian Institute of Architects (MNIA) and a Fellow of the Institute of Corporate Executives of Nigeria. He has attended numerous training programmes on Computer Aided Designs, Design and Build Workshops and Project Management in addition to several other professional and leadership training programmes both within and outside the country.
The new Managing Director/Chief Executive officer of the FMBN was until his appointment, the Managing Partner of AM Consults since 1996, an architecture and real estate development consultancy firm, and Jarlo International Nig. Ltd, a Construction Company, where he supervised the delivery of several outstanding projects in diverse areas and sectors across the country, mainly in real estate development.
Dangiwa leads a team of dynamic professionals that include Melville Ebo, Executive Director [Finance and Corporate Services], Rahimatu Aminu-Aliyu – Executive Director [Loans & Mortgage Services] and Dankane Umar Abdullahi – Executive Director [Business Development & Treasury Services].
Ebo has built a highly successful career for over 25 years in Political Planning, Public Relations and Entrepreneurship circles and civil societies both locally and internationally. Before his appointment, Ebo worked with United Bank for Africa Plc and had undertaken a wide range of projects at both Local and National levels.
Mrs Aminu-Aliyu holds a Bachelor of Law Degree (LLB) from the University of Maiduguri and an LL.M in International Law. She has a reputation as a versatile Legal practitioner with specialty in Finance, Property and International Law. Abdullahi is a Financial and General Management expert with over two decades of cognate experience. He obtained his Bachelors and Masters Degrees from Usman Danfodio University, Sokoto.
At a time of economic recession, the FMBN has found innovative ways to deliver on its mandate. It grants NHF Mortgage Loans at four per cent interest to accredited PMIs for on-lending at six per cent to NHF contributors over a maximum tenor of 30 years, which is secured by the mortgaged property. A contributor can access up to N15million from the Fund through an accredited PMI as a mortgage loan to build, buy, improve or renovate own home after 6 (six) months of continuous contributions.
This lending conditions make the NHF unequalled as a vehicle for affordable housing delivery in Nigeria. It is also granting Estate Development loans to private developers, State housing corporations and housing cooperatives to bridge the housing deficit through mass production of houses for ownership by NHF contributors. The facility is granted at 10 per cent interest with a maximum repayment period of 24 months. It is a facility devised to facilitate large scale production of houses for sale to contributors at affordable prices and thereby, expand the availability of affordable housing in Nigeria.
As a general policy of the Bank, houses produced through the EDL window should not exceed N15 million in price and must be sold only to NHF contributors.
It also grants loans to Cooperative Societies to enable them acquired land to develop houses for allocation to members. Eligible Cooperative Societies/cooperators can access the Cooperative National Housing Fund Loan (CNL) to purchase housing units developed through the CHDL scheme. In order to qualify to access NHF resources, individual members of a Cooperative Society are required to register with the NHF through their Cooperative Societies and make a minimum monthly contribution of 450 Naira over a minimum period of six months. Furthermore, cooperative members are required to make an equity contribution of 15% of the cost of the house when taking the mortgage.
Another innovative product offered by the bank is the Home Renovation Loan which affords contributors an opportunity to access mortgage loans for the renovation or improvement of their existing homes which are personally owned by them or through family ownership. With a maximum tenor of five years, contributors can access up to 1million Naira at an interest rate of six per cent for the duration of the loan.
FMBN also funds Capital Market Window through liquidity generated from the capital market and other local and offshore funding sources. Though yet to be fully realized, this window will form the fulcrum of the Banks’ mortgage and housing finance operations in the near future. The pricing of products from this window would be driven by the market.
– Tayo wrote from Abuja.