The Federal Mortgage Bank of Nigeria has announced a strategy to increase access to affordable housing finance for more than 70% of Nigerians who are part of the unsalaried workforce. Shehu Osidi, the Managing Director/Chief Executive of FMBN, made this known during the 18th Africa International Housing Show in Abuja.

The conference gathered key players in the housing industry to tackle the housing issues faced by the continent.

Osidi emphasized the bank's goal to lead the way in housing finance throughout Nigeria.

“Our vision is encapsulated in aggressively pursuing significant strategic goals and repositioning the bank towards shaping its future to champion housing finance inclusiveness across socioeconomic and demographic segments of the country,” he stated.

The CEO of FMBN highlighted the bank’s primary objective of developing accessible mortgage solutions tailored to the informal sector, which constitutes a substantial portion, exceeding 70%, of Nigeria’s labor force.

“We will achieve this through cooperative societies and trade/markets associations,” he stated.

He indicated that the bank intended to open new branches nationwide to enhance access to affordable housing finance for millions of Nigerians.

The Africa International Housing Show, which commenced in 2005, is an annual gathering that unites housing professionals, policymakers, and industry experts to tackle the housing issues facing Africa.

This year's event emphasized innovative approaches to affordable housing and sustainable urban development.

Osidi further mentioned that the bank had received a refund of N12 billion from the total N19 billion in erroneous deductions from the National Housing Fund contributions, which had been incorrectly classified as revenue under the 40 percent deduction policy applicable to federal agencies.

In 2023, the Federal Government commenced the implementation of an automatic 40 per cent deduction of internally generated revenues of its agencies and other partially funded institutions across the country.

The auto-deduction policy of gross IGR is in line with the finance circular with reference number FMFBNP/OTHERS/IGR/CRF/12/2021 dated December 20, 2021.

It, however, in a circular, limited the annual budgetary expenditure from IGR of the partially funded federal government.

The Managing Director of FMBN mentioned that they have commenced productive discussions with the Federal Ministry of Finance in order to reclaim reimbursements for the incorrect deductions of NHF contributions that were mistakenly categorized as revenue under the 40% deduction policy for federal agencies.

This effort resulted in the retrieval of N12bn out of the remaining N19bn into the bank's funds. Osidi also highlighted that the bank will continue to interact with the appropriate bodies until the deduction of LS is ceased.

“We recover outstanding balances trapped by NHF funds,” he said.

The new management of the bank has presented a proposal for its recapitalization to the Federal Executive Council through the Ministry of Finance.

 “This effort has led to the establishment of an inter-agency committee on the recapitalisation of the bank towards improving its capacity for providing adequate liquidity for the Nigerian housing finance sector and affordable housing delivery in Nigeria,” he explained.

He observed that the committee responsible for recapitalisation comprised representatives from the Federal Ministry of Finance, the Bureau of Public Enterprises, the Ministry of Finance Incorporated, and the Federal Ministry of Housing and Urban Development.

The Governor of the Central Bank of Nigeria, Olayemi Cardoso, stated that the central bank initiated the bank recapitalisation process in November 2023.

Subsequently, in March 2024, a circular was issued to the banks, instructing commercial banks with international authorisation to elevate their capital base to N500 billion, while national banks were required to increase theirs to N200 billion.

The central bank has set the year 2026 as the deadline for these commercial lenders to complete the recapitalisation process.