The managing director of the Federal Mortgage Bank of Nigeria, Shehu Osidi, has emphasised the need to review the FMBN and National Housing Fund Acts to enhance affordable housing financing in Nigeria.

Speaking on Wednesday in Abuja during the anniversary of his one year in office, Mr Osidi stated that the review was essential to addressing challenges in the housing sector and expanding affordable housing options for Nigerians.

According to him, the current acts limit the bank’s ability to deliver on its mandate fully.

A review, he noted, would strengthen FMBN’s capacity to achieve its objectives more effectively.

“Our biggest challenge in the FMBN is under capitalisation because even the primary mortgage banks that we fund are more capitalised than we are.

“The second major challenge is that the NHF Act provides that the commercial banks are to contribute 10 per cent of their total output portfolio to the NHF in order to assist in financing affordable housing.

“Insurance companies, by the Act, are also required to contribute 40 per cent of their life loans and 20 per cent of their non-life loans into the NHF scheme to facilitate housing delivery,” said Mr Osidi.

Mr Osidi, however, revealed that since the establishment of FMBN and the provision of its law, neither any commercial bank nor insurance company had complied with the law.

He stated that in its quest for solutions, the bank engaged extensively with the Central Bank of Nigeria and resolved to amend the FMBN Act to include a provision requiring 10 per cent of profit after tax from these organisations as a corporate social responsibility contribution.

Mr Osidi said that one of the management’s key strategic objectives upon assuming office at FMBN was to recapitalise and strengthen the bank to enhance its ability to deliver on its mandate effectively.

He also mentioned that compared to its global counterparts and given the critical nature of its mandate, describing FMBN as undercapitalised would be an understatement.

According to him, with a paid-up capital of only N2.5 billion, the bank lags behind even a national primary mortgage bank in financial capacity.

“We made it a top priority to pursue the recapitalisation of the bank through the injection of N500 billion fresh capital. Out of this, N250 billion is to be injected by the Federal Government while we will raise the balance through debt capital,” he said.

Mr Osidi said this led to submitting a memorandum to the Federal Executive Council by the Minister of Housing and Urban Development, Ahmed Dangiwa, for the recapitalisation of FMBN.

(NAN)