FMBN assures investors on N500bn recapitalisation drive

Managing Director/Chief Executive of the Federal Mortgage Bank of Nigeria (FMBN), Shehu Usman Osidi, on Thursday, unveiled plans towards the actualisation of the N500 billion in new capital to empower the bank to play its rightful role as Nigeria’s apex housing finance institution.

Mr Osidi, who gave the assurance in Abuja during the ongoing African International Housing Show (AIHS), themed: ‘Re-imagining Housing through Innovation, Collaboration and Policy’, observed that the Central Bank of Nigeria (CBN)’s directive on the recapitalisation of banks was aimed at growing a $1 trillion national economy.

To achieve the N500 billion recapitalisation feat for the bank, the Federal Government has approved the establishment of an Inter-Agency Committee to develop a sustainable recapitalisation roadmap for the Bank.

While noting that the most pressing challenge that continues to limit the Bank’s full potential is recapitalisation, the FMBN helmsman maintained that the “current paid-up capital of N2.5 billion is wholly inadequate for the size of its mandate.”

He, however, observed that similar housing finance institutions such as India’s National Housing Bank (NHB), Housing Development Board (HDB) in Singapore, Treasury Housing Loan Division (THLD) in Malaysia, FOVISSSTE and INFONAVIT in Mexico, have a capital base exceeding N250 billion, powering their ability to refinance hundreds of thousands of mortgages annually.

While noting that Primary Mortgage Banks (PMBs), which operate at a much smaller scale than FMBN, have higher capital bases, Mr Osidi explained that “CBN’s minimum capital requirements for wholesale and retail Development Finance Institutions (DFIs) are N100 billion and N10 billion respectively, while state and national primary mortgage banks (which are expected to rely on FMBN for funding) currently have minimum capital bases of N2.5 billion and N5 billion respectively.

“Currently, the CBN has directed higher capital levels for banks as a way forward to growing a $1 trillion national economy.

“This situation severely undermines our ability to: mobilise long-term finance from local and international markets/sources; underwrite and finance large-scale housing construction; expand our mortgage coverage to more Nigerians; and, ultimately, deliver on our mission of actualising access to affordable housing.”

Some of the achievements recorded by the bank so far include the provision of a N100 billion off-taker guarantee to facilitate the mobilisation of required funding for the ongoing Renewed Hope Housing and Estates Programme in Abuja, Kano, Lagos, and other locations across the country.

He added that the Bank also “extended an additional funding facility of N19.9 billion for the Karsana project in Abuja.

“This is apart from our funding of Renewed Hope City, Ibeju Lekki, Lagos, to the tune of N27 billion to deliver 1,500 units of 2- and 3-bedroom apartments. The Bank is also providing mortgages for Nigerians who are contributors to the NHF to offtake the houses constructed under the programme across the country.

“We are also introducing new products to deepen affordable financial inclusion and promote homeownership. As announced during the opening ceremony of this conference, starting this August, we are set to roll out three groundbreaking products, including: the FMBN Non-Interest Mortgage Loan, which aligns with ethical finance principles to cater to the needs of Nigerians who prefer non-interest banking models;

“The FMBN NHF Diaspora Mortgage Loan, specifically designed to provide a safe and seamless homeownership pathway for Nigerians living abroad. This product is to be launched on 31st August 2025 in collaboration with NiDCOM and the CBN; and

“Rent Assistance, a customised product tailored to meet the immediate needs of NHF contributors in both formal and informal sectors before they own their homes.”

The Bank is also working towards rolling out a Women Housing Initiative in collaboration with the Federal Ministry of Women Affairs, whereby everyone involved in delivering the housing projects under the scheme will be women — from the design architects to the engineers, the artisans, and the labourers — all will be women.

Speaking on the recovery efforts put in place on assumption of office, he disclosed that the seven Recovery Task Teams inaugurated in 2024 to recover delinquent loans across the country’s geopolitical zones, as at the end of 2024, “raked in over N10.9 billion in bad loans.

“This was in addition to our normal recovery activities, which also yielded the sum of N3.1 billion in the same year. The recovery from the Teams is currently at over N18.9 billion. We have also improved our loan approvals significantly, with a total sum of N71.5 billion approved under our loan operations in the past year, compared to N39.7 billion in 2023.

“Under the National Housing Fund (NHF) operations, our collections grew by N3 billion in 2024, resulting in a total collection of N103 billion compared to the N100 billion the Bank recorded in 2023.

“Notably, we were also able to clear a four-year backlog out of our outstanding unaudited accounts (2018, 2019, 2020, and 2021), demonstrating our renewed commitment to financial transparency and good governance. I believe by the time we come to this platform next year, FMBN should have been up to date in its audited accounts. Our target is to achieve this milestone by the end of this year, 2025.

“Our financial performance has also improved. In 2024, as outlined in our Management Accounts, the Bank made an operational surplus of N11.5 billion — the first time we have had such an achievement in over 30 years since FMBN came into existence. With prudent management and growing operations, we are on track for another surplus in 2025.”

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