By  Yinka Kolawole
A tripartite committee of the Federal Mortgage Bank of Nigeria (FMBN), Real Estate Developers Association of Nigeria (REDAN) and Mortgage Banking Association of Nigeria (MBAN) has been constituted to explore the possibility of granting interest waivers on existing Estate Development Loans (EDLs) on disputed housing schemes across the country.

President of REDAN, Chief Olabode Afolayan, who disclosed this recently at the AGM of the association in Lagos, said that the developers are seeking a review of the FMBN’s terms and conditions applicable to both NHF and EDL schemes, including a strong advocacy for the remittance of a reasonable percentage of fees, such as 0.25 per cent payable by developers on EDL, to accrue to REDAN.

“We are extremely disturbed by recent developments on the EDL issue, which viewed by recent trends, appears to have taken a new twist, despite extensive effort spanning a period of five months by the principal parties to resolve the matter amicably based on available facts on the ground.

“Take for example, people who got the Estate Developers’ Loan from the Federal Mortgage Bank of Nigeria (FMBN). A lot of them are being chased around now. Although they have completed the houses but because of an incomplete transaction circle, their accounts have not been credited. Because of this, interests keep on piling and piling.

“Somebody got N800m to construct 250 units of houses. After building these houses, they amount to N1bn; today, what he owes is N1.7bn.

This is so because of the interest elements arising from incomplete transaction circle cropping up from the agencies not coming up for assignments, legal mortgages and all the rest.

How do you want him to pay expect you bail him out and banks do this from time to time. Banks do interest waiver and that is what we are negotiating with the FMBN and other developmental banks providing the funding. We are agitating for it and we are confident that the present government will adjust it,” he stated.

Afolayan also noted that REDAN had established a public private partnership scheme aimed at fostering profitable and cost effective partnership between public and private sectors by harnessing the pool of resources and expertise of the private sector in accelerating housing delivery.

According to him, a joint committee has already developed a blueprint and prototype models to fast-track housing delivery proposals by members.

He said that the committee would establish an inter-bank committee to harmonise and negotiate suitable financing models packaged with concessionary terms and conditions for housing development projects as well as proposals for acquisition of a land bank under the National Housing Policy programme for subsequent allocation to developers across the country.

Afolayan said that REDAN’s 400,000 housing scheme originally planned to be launched and flagged-off early in 2010 had been suspended due to “unavoidable circumstances,” but was now in progress ahead of a formal launching in the third quarter of the year.

It would be recalled that FMBN last year published a list of some developers as alleged bad debtors, the publication which REDAN immediately denounced, noting that it did not paint a true picture of the situation.

He said in order to avoid destroying the mortgage system, the development must be handled with care, adding that developers should be involved in some of the reforms, and urged CBN, in particular, to issue separate prudential guidelines to all the development financial institutions such as FMBN, BOI, Urban Development Bank, etc, to reflect the peculiar nature of their transactions, which are totally different from that of consumer lending.