May 8, 2014

WEF: Chinese investors offer FMBN $4bn mortgage fund

WEF: Chinese investors offer FMBN $4bn mortgage fund

Naira notes

BY EMMA UJAH, Abuja Bureau Chief

Nigeria’s mortgage industry has become one of the first major beneficiaries of the World Economic Forum, WEF, Africa, with Chinese investors offering the Federal Mortgage Bank of Nigeria, FMBN, $4 billion to boost the nation’s housing infrastructure.

Managing Director, FMBN, Mr. Gimba Yau Kumo, disclosed at the sideline of WEF, in Abuja, yesterday, that part of the 200-man strong Chinese delegation would meet with his management team and other relevant government officials for final agreements on the deal.

His words: “The Chinese have made an offer to us to lend us about $4 billion dollars to the Federal  Mortgage bank of Nigeria.   The only requirement they are asking for now is for the Federal Government to give them  a Sovereign Guarantee. To them, they believe this is the way they have been financing housing industry in other climes, especially in Brazil and Singapore where they have a very strong presence.

“This is the normal requirement which they usually ask for in other climes where they have been financing mortgages across the world. For instance, the Chinese have a very strong presence in Singapore’s property industry.”

Kumo revealed that the FMBN management had engaged with the Coordinating Minister for the Economy and Minister of Finance, Dr. Okonjo-Iweala, with a view to getting the federal government to accept the terms of the Chinese. He expressed optimism that the deal would be sealed, given the robust opportunities for boosting the housing sector with the facility.

The FMBN boss said his team which came on board in December 2010 had transformed the bank into a profitable public organisation which has granted loans totaling N119 billion to Nigerians wishing to own their personal houses.

According to him, between December 2010 and April 2013, the bank recorded N82.1 billion as National Housing Fund, NHF, collections which was about 61.2 percent of the cumulative NHF collections of N134.1 billion since inception. He explained that with a strong collection drive embarked upon by his team, average monthly collection rose by 174 percent from N730 million, pre-2010, to over N2 billion.

Kumo further explained that the jump in the monthly collections was enhanced by the enlistment of six additional states, namely: Akwa-Ibom, Sokoto, Benue, Enugu, Taraba and Borno into the scheme.

He added that in the last 41 months, the bank gave out N33.4 billion and N23.8 billion as estate development and mortgage loans, respectively. “By aggregation, the total disbursement of N57.2 billion recorded in the past 41 months constitutes 48 percent of the N119.1 billion to date,” he said.

Kumo said FMBN had cumulatively delivered 39,425 housing units, of which 12,420 (31.5 percent) were in the last 41 months. He also disclosed that the organisation helped finance the acquisition of FG Non-Essential Residential Houses in the FCT by Nigerians under the N100 billion Mortgage-Backed Bond programme