Kunle Faleti is a highly skilled mortgage professional and international housing finance expert with more than 25 years cognate experience with publicly quoted renowned financial institutions in the United States of America (USA) and Nigeria. In this Interview with DAYO AYEYEMI, he speaks on the underdeveloped housing and mortgage sectors in Nigeria, he is of the view that the Federal Mortgage Bank of Nigeria (FMBN) be restructured and the state governments should be held accountable for housing policy implementation.
How would you assess the housing and infrastructure development in Nigeria, 61 years after?
The state of housing and major infrastructure is a colossal failure. Manipulations, massive corruption and lack of will have derailed all good attempts and intentions to build infrastructure and affordable housing across the country.
What are the issues?
Leadership has failed to create the enabling environment that will ensure full public sector participation in affordable housing delivery. Government should not be directly involved in construction. There are different initiatives being set up, but all lacking collaboration. The informal sector, which is where most low income earners belong, is neglected. Most policies focus on white collar, blue collar and people diaspora.
What are the things the leadership failed to do to enhance home ownership?
The major challenge is the lack of will on the part of policy makers and regulators. There is a big knowledge gap and lack of required skills set in the part of mortgage banks’ employees. Round pegs are being put out in square holes to implement policies.
Why is the mortgage sector still crawling?
The reason is simple, the business model is obsolete. FMBN’s role 45 years ago is still being put into practice. It cannot work. Banks do not have the long-term capital for obligations such as 25 year mortgages. Risk assessment modules are nonexistent. Credit bureaus are not fully leveraged. Take a look at my status for example. As a system, we are not pro-active, we only react.
How has the private developer fare?
Private developers are trying. They borrow money at a very high interest rate. They bribe public officials to get building approvals; they are harassed by the omo oniles; they pay excessive rates for building materials; and they also provide roads, electricity and basic infrastructure for their estates – which should be a role done by the government. They are doing the best they can in an environment that is hostile to business.
What is the way forward for the nation’s housing/mortgage sector?
Way forward includes restructuring of FMBN. Federal government should not be involved in direct construction. Review the current national housing policy and bring it to par with the current realities. One cap does not fit all. State governments should be responsible and also held accountable for housing policy implementation. Technocrats should be engaged to drive and implement federal and state housing agencies.
and then