•As NHF grows 18%, non-compliance lingers
•More retirees withdraw

By Kingsley Adegboye

There are indications that Nigeria’s housing delivery programme has begun to yield results as the National Housing Fund (NHF) recorded 18.2 per cent growth to N399.6 billion in the first half of 2020 (H1’20) against N338.1 billion in the corresponding period of 2019, H1’19.

But this came against the backdrop of rising withdrawal of funds by retirees from the fund while institutional non-compliance by corporate bodies remains huge factor.

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Data obtained from the Federal Mortgage Bank of Nigeria (FMBN), custodian of the fund, by Vanguard also indicated that the number of registered contributors to the fund increased to 5,070 during the period under review from 4,868.

According to the data, the number of housing units delivered during the period under review increased to 28,692 from 27,500 while the number of people who obtained mortgage loans increased to 21,187 from 20,401.

The set of data also shows that home renovation loans disbursement during the same period under review increased to N40.6 billion from N27.3 billion while number of beneficiaries rose to 50,092 beneficiaries from 25,214 beneficiaries.

Total loans disbursed as at June 2020 was N253.03 billion as against June 2019 figure of N222.9billion.

However, there is also indication that a growing number of retirees are getting refunds from the fund, being unable to realize the purpose of their contribution to the NHF, which is to have their own houses.

Data shows that the number of retirees that collected  refunds increased to 300,726 from 266,258 in the corresponding period of 2019. The total refund was also higher at N35.4 billion against N29.3 billion.

The performance indicators equally revealed that NHF has challenges of non-compliance with the NHF Act by some employers, banks and insurance companies, just as low income levels of workers in the country has constituted a major difficulty to accessing mortgages.

There are also the issues of absence of primary mortgage institutions (PMIs) in some states of the federation to help facilitate disbursement of the fund, and lack of model mortgage and foreclosure laws in most parts of the country to stimulate growth of the nation’s mortgage sector.

Reacting to this growth rate, operators in the mortgage and housing sub-sectors of the nation’s economy have commended FMBN for the achievement, saying it will have a positive impact on the nation’s housing industry.
Describing the growth rate as a major achievement, President of Mortgage Bankers’ Association of Nigeria (MBAN), Mr. Niyi Akinlusi, said in the history of the fund, these figures as presented by FMBN, had never been recorded within one year, stressing that this was made possible of the ingenuity of the present management of FMBN, managers of NHF.

Akinlusi said: “This achievement is a major one, and it will have a positive impact on housing. This was made possible because of the ingenuity of the current management of the fund. The current management of the fund has been able to woo more people including individual Nigerians and corporate organizations that were not contributing into the fund to start contributing to the fund. That was the reason for the growth within one year, which had not happened before since  establishment of NHF in 1992.

“Besides, the current management of FMBN has been able to introduce innovative products to attract more contributors to boost the fund. The more money they have, they more they can disburse as mortgage loans to people. Kudos to this current management because they are doing a lot to generate funds into NHF. This explains why they have been able to deliver up to 1,000 housing units within one year.

“FMBN does not receive subvention from the Federal Government. The fund depends on collection from contributors into the fund, and the more collection it generates, the more the loans it can disburse to prospective loan seekers and more interest will be generated to the fund. The fund is doing well, but the management can still do more because of the huge housing deficit in the country. This management must be commended for its giant strides by being able to bring more people into the fund which is yielding positive results for the fund.

Equally commending the managers of the fund for the growth, National President of Nigerian Institute of Building (NIOB), Mr. Kunle Awobodu, said throughout military rule in Nigeria, they were only able to deliver 1,500 housing units, adding that the Federal Ministry of Works and Housing was able to deliver 1,210 housing units across the 36 states in the country and Abuja between 2015 and now.

“It is a welcome development for the managers of the fund to deliver about 1000 housing units within one year. We still need to do more considering the huge housing deficit in the country. If you imagine the number of youth corps members being churned out every year, and the fact that they will need to settle down upon getting jobs, shows that there will always be demand for housing in Nigeria. This is why there is the need to do more by the government and everybody to reduce the huge housing gap of the country,” Awobodu said.

Meanwhile, the National Housing Fund (NHF), which came into effect on 31st January 1992, is to facilitate the mobilisation of the fund for the provision of affordable housing for Nigerians, and ensure the constant disbursement of loans to Nigerians for the purpose of building, purchasing, and improvement of residential houses.

Contributions by Nigerians both in the public and private sectors; investment in the fund by commercial and merchant banks, investment in the fund by insurance companies registered under the Insurance Act; and
Financial contributions by the Federal Government for long-term housing loans are expected to be paid into the fund.
Under the Act, a Nigerian worker earning an income of N30,000 and above per annum in both the public and private sectors is required to contribute 2.5 per cent of his/her monthly basic salary to the fund. Commercial and merchant banks are also mandated to invest 10 per cent of their loans and advances in the Fund at an interest rate of one percent above the interest rate payable on current accounts by the banks.

Also, all registered insurance companies are required to invest a minimum of 20 percent of their non-life funds and 40 percent of their life funds in real property development and this is to be paid into the fund through FMBN at an interest rate not exceeding 4.5 percent. There is no mandatory percentage of revenue specified for the Federal Government.

The proceeds from the fund are used to finance the housing sector through wholesale mortgage lending to primary mortgage institutions by FMBN.

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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.