Recapitalised FMBN, NMFC will boost mortgage penetration – Pepple
By YINKA KOLAWOLE
Ongoing moves to recapitalise the Federal Mortgage Bank of Nigeria (FMBN) and the impending take-off of the Nigerian Mortgage and Finance Corporation (NMFC) will both go a long way to effectively tackle the low mortgage penetration in the country.Minister of Lands, Housing and Urban Development, Ms. Ama Pepple, stated this recently during the inauguration of the Board of Directors for FMBN in Abuja.
According to her, “with the Nigerian Mortgage and Finance Corporation complementing a recapitalised FMBN under the new board, I am confident that many of the challenges associated with low mortgage penetration in the country in the past will be addressed sooner than later.” She urged the board to develop alternative funding mechanisms that would match the needs of mass housing delivery in the country.
The Nigerian Mortgage and Finance Corporation (NMFC) is a liquidity facility vehicle aimed at injecting funds into the Nigerian mortgage sector. It is an initiative of Mortgage Banking Association of Nigeria (MBAN), in collaboration with the International Finance Corporation (IFC), World Bank, Central Bank of Nigeria (CBN) and the Federal Ministry of Finance, and is expected to become operational in the third quarter of this year, with an initial capital of N20 billion.
Meanwhile, the minister has directed developers of new estates in the country to incorporate between 15 and 20 per cent low-income houses in their projects. She said the directive was borne out of the need to provide sustainable housing for low-income earners, and is in line with federal government plan to ensure affordable housing and reduce the estimated 16 million housing unit deficits in the country by delivering one million houses per year.
“I have directed that housing estate developers, FMBN and Federal Housing Authority must deliver 15 to 20 per cent low-income houses. This is because when you sell the more expensive ones, it makes up for the ones that are low-income. In fact, we have an estate that we are building in Kuje, where a three-bedroom semi-detached building is N6m. This is one way of making houses affordable as well as to check the issue of housing deficit in the country,” she stated.
Pepple added that government is making arrangements with dealers of building materials to achieve this and to make housing accessible to individuals who may not be able to afford as much as N6 million. The minister urged members of the board to work with stakeholders for sustainable housing delivery, especially affordable low-cost housing, social housing and cooperative housing.
Chairman of the new Board, Chief Olabisi Ogunjobi, in his acceptance speech on behalf of the board members, stressed the importance of an efficient housing sector to economic development. “The housing sector development is an effective instrument for stimulating economic growth, wealth creation, society stability and employment generation all over the world. Indeed, housing construction is one of the most used indices for gauging the economic situation in most developed countries.
It is perhaps no coincidence that the global economic recession of 2008/2009, and whose effect is still very much around today, was precipitated by a crisis in the housing sector. The lesson for us as a nation is that a sustained economic development must be hinged on proactive housing sector development,” he remarked.