By Yinka Kolawale
The Federal Mortgage Bank of Nigeria (FMBN) requires a massive recapitalisation to enable it fulfil its mandate of providing the needed finance to meet the nationâ€™s housing needs.
Managing Director/Chief Executive Officer, FMBN, Mr. Abdulsalam Ahmed, said at a recent interactive session with members of the House of Representatives Committee on Housing and Habitat that the nationâ€™s apex mortgage bank needs approximately N40 billion (about $132million) capital base in order to effectively carry out its operations.
According to him, the current N5 billion (or $17 million) capital base of the bank is grossly inadequate in view of the magnitude of its mandate to bridge the housing finance gap in Nigeria, which runs into trillions of naira.
Ahmed asserted that FMBNâ€™s current capital base is insignificant when compared with an average capital of $132 million held by similar institutions in some other countries.
He lamented that the current amount of N5 billion as capital base, poor as it is, was yet to be fully paid up because, according to him, the Central Bank of Nigeria (CBN) and the Nigerian Social Insurance Trust Fund (NSITF) are yet to pay their equity contributions of N1.5 billion and N1.0 billion respectively, representing 30 per cent and 20 per cent of the current approved capital base. He noted that the National Housing Fund is still grossly under-subscribed due to labour resistance, despite the improved awareness campaigns.
The FMBN boss said that the bank is groaning under huge outstanding loan commitments to the tune of N45 billion being unfunded approved loans in view of a constrained liquidity of N10 billion.Â He however, disclosed that N2.093billion was recovered as non-performing loan of facilities from 42 mortgage institutions across the country, between January 2008 and July 2009, noting that the Debt Management Office (DMO) has approved a roll-over of the N5 billion facilities for another period of three years for FMBN.
He said the gesture was extended to the bank because throughout the tenor of the facility, which was provided for the bankâ€™s mortgaging refinancing operations, it met its interest and principal obligations on the facility.
Ahmed listed the organisations from which the recoveries to include; Jigawa Savings and Loan, Ogun State Housing Corporation, Rivers State Housing and Property Development, Akwa Savings and Loans, Federal Housing Authority, Intercontinental Homes S&L.
Others are Shelter Initiatives Limited, Greenlands Engineering Ltd, Hallmark Savings and Loans, Ekiti State Housing Corporation, CITEC International Estates, First Generation Homes, Larix Company Limited and Imani and Sons.