Nigeria to raise mortgage bank capital to N250bn

The Federal Government will soon raise the share capital of the Federal Mortgage Bank of Nigeria, FMBN to about N250 billion.

The managing director of the bank, Gimba Kumo, said this would enable the bank realise its mandate of drastically reducing the country’s housing deficit problem currently at about 17 million units.

Mr. Kumo, who spoke at a send forth/ welcome dinner organised by the bank for its management in Abuja, did not give a time frame for the recapitalisation exercise.

He, however, said discussions were ongoing currently among key industry operators concerning the issue.

“We have set an agenda for ourselves. Chief among them is the recapitalization of the bank”, he said. “We have made substantial progress on that. In the next few weeks we will see results on the table.

“We will continue to work hard to satisfy the yearnings of Nigerian workers.”

According to Mr. Kumo, the bank was grossly undercapitalized compared to other countries, even in West Africa.

He said there was need for the government to speed up the process to improve its capitalization.

A new capital base, he said, would place the FMBN in a better position to refinance mortgages, as it cannot meet the bulk of the demands for mortgage loans from its various stakeholders at the moment.

The managing director said the only source of funding the bank has to meet the huge demand by Nigerians was the National Housing Fund collection, which he described as minimal, compared to the country’s housing needs.

Every worker, he said, was expected to contribute 2.5 per cent of his or her salary to the fund, saying the sum was small, compared to the housing needs of Nigerians.

The FMBN, he noted, has tried to improve on the little funding available for its operations, adding that within the next few months the bank would be able to do more.

The chairman of the board of the bank, Bisi Egunjobi, while welcoming the new executives, also commended the former executives on their efforts to restore the bank to its pride of place.

He said ready to work towards building an institution everyone would be proud of, adding that the bank has recovered from its recent poor experience and was set to attain greater heights.

“We believe that over the last two to four years various elements have been put in place to allow the institution be on its feet. The expectation is that the bank is ready to attain higher heights,” he said.