By Samson Echenim

Monday, 6 Dec 2010

Primary Mortgage Institutions have called on the Federal Government to recapitalise the country’s apex mortgage institution, the Federal Mortgage Bank of Nigeria, to the tune of N120bn, to enable it perform efficiently.

The PMIs also called for the repositioning of the FMBN so that it could handle secondary mortgages and capital market operations.

The position of the PMIs was disclosed by the Managing Director and Chief Executive Officer, Diamond Mortgages Limited, Mr. Adekunle Faleti, at a forum attended by mortgage bankers, FMBN officials and private sector employers in Lagos.

In his paper titled, “Making the National Housing Fund Meet the Needs of Contributors: Private Mortgage Institutions Perspective,” Faleti said the near absence of a viable and functional mortgage system in the country presented a peculiar challenge.

He said that the urgent intervention of government in repositioning the FMBN was needed to make it perform better

He said, ”It will be impossible to make any serious headway in tackling the housing problem if something is not done urgently to reposition the FMBN. In setting it up, the thinking of government was for FMBN to jumpstart housing finance and become the nucleus for the development of a mortgage industry.

“The FMBN has for long remained grossly undercapitalised and, therefore, unable to achieve its full potential.”

Faleti, however, noted that the FMBN was important to the future of housing in Nigeria, saying that as a bank upon which the housing aspiration of millions of Nigerians depended, the FMBN must be managed professionally and efficiently.

The mortgage banker advised that in view of the shortage of housing finance, it was necessary to link the housing industry to the capital and bond markets.

Faleti added that the Central Bank of Nigeria should consolidate the activities of the PMIs.

He explained that with the new management of FMBN currently in process, the organised private sector should continue to contribute to the fund.

He said employers must educate their workforce on the importance of home ownership and ways of accessing mortgages through seminars, workshops and conferences.

“We also need to encourage trade unions, staff associations and cooperatives to contribute to the fund. Contributors must also demand accountability from the fund administrator,” Faleti said.

According to him, a bright future awaits the mortgage and housing industries with state and federal government‘s involvement. Nigeria also needs to establish a technology driven innovative building models, he said.

Source: Punch