Senate urges FMBN shareholders to pay up equities

The Senate Committee on Lands, Housing and Urban Development has urged shareholders to pay up their equities in order to actualise the planned recapitalisation of the Federal Mortgage Bank of Nigeria (FMBN).

A statement issued in Abuja on Tuesday by FMBN Managing Director, Mr Ahmed Dangiwa said that the Chairman of the Committee, Sen. Barnabas Gemade made the call while on an oversight visit to the bank.

Gemade listed the shareholders to include the Federal Government, Central Bank of Nigeria (CBN), and Nigeria Social Insurance Trust Fund (NSITF).

He observed that the CBN had vital role to play in making the FMBN function effectively by exercising its statutory roles, especially in the areas of funding and regulation.

“There is no way FMBN can address the plethora of daunting challenges in the mortgage industry without being supported by the CBN and the Federal Government."

“The N5billion capital base of the FMBN is abysmally low and the shareholders should hasten up by increasing the capital base to reflect current realities."

“CBN should sanction commercial banks that defaulted in remitting 10 per cent of their loan portfolio to FMBN as investment to the development of a virile mortgage industry as required by the law.’’

He promised that the committee would also ensure amendment of both the FMBN and National Housing Fund (NHF) Acts to make the bank function effectively.

Gemade said that N100 billion was approved in 2017 budget as intervention fund to support mortgage activities in the country.

He directed the bank to follow up the matter with its supervisory ministry, adding that the Ministry of Power, Works and Housing should contact the Federal Ministry of Finance to secure release of the fund.

In his remarks, Dangiwa said the bank had not received budgetary allocation from the Federal Government since its establishment.

“Therefore, we rely solely on income generated from contributors under the NHF scheme to finance our activities,” he said.

He lamented that the current N5 billion capital base of the bank was grossly inadequate, in view of the magnitude of its mandate to bridge the housing finance gap in Nigeria which was in the region of trillions of naira.

According to him, FMBN has commenced strategic partnership with the Nigeria Inter-Bank Settlement System (NIBSS) Plc for the management of mortgage–related transactions to reduce loan repayment default to the barest minimum.