To Get Personalised contents and be able to add items to your favourites, please Sign In or Sign Up          
 

FMBN determined to raise mortgage sector contribution to GDP to 15%


News » Health and Beauty
Nigeria

IMAGE: Federal Mortgage Bank of Nigeria »

October.21.2014

One of the major highlights of the recent rebasing of the Nigerian Gross Domestic Product (GDP), now valued at $510, was the revelation of the performance of the various sectors of the national economy and their impact or contribution to the overall performance of the economy.

For the mortgage sector and its operators, it was not cheering news that the sector which, in developed economies of the world, is a major contributor to economic growth and development, makes less than one percent contribution to the GDP.

It is against this backdrop that the management of the Federal Mortgage Bank of Nigeria (FMBN) has resolved to put measures in place targeted at growing their contribution to the GDP from less than one (about 0.5 percent) to 15 percent. This, analysts say, is an ambitious move.

‘’The mortgage industry in Nigeria is just starting. If you look at the size of our contribution to the GDP, you will see that it’s less than one per cent, but my target before I leave here is that we should be able to contribute, at least, 15 per cent. That is why we are putting a lot of issues on ground to be able to drive this process”, Gimba Kumo, the FMBN managing director, assured recently. 

Kumo who spoke at a Presidential Stakeholders Retreat on Housing and Urban Development in Abuja, added, “if you look at the National Housing Fund (NHF) that we are managing, out of the 170 million population, less than one per cent are the ones contributing. So, we said this is not good and tasked ourselves on how to reach the other segments of the society that are not in formal employment”.

He noted that  those in the lowest strata of the society have not benefited from the bank’s loans because they have limited capacity to pay for houses as the income they generate is very small, adding that this led to the introduction of the Cooperative Loan Scheme.

“The scheme was brought about to extend the bank’s services to people who can be termed disadvantaged in the society because their income is low, irregular and difficult to access under the NHF loan window. What the bank has now done is to use corporative societies in the informal sector to reach them”, he informed.

FMBN became the focal point when the Federal Government at the retreat resolved to revolutionalise the mortgage sector by translating the National Housing Policy and National Urban Development Policy into a road map for housing development.

With a mandate that includes, among other things, encouraging the emergence and promoting the growth of viable primary mortgage institutions to service the need of housing delivery; mobilizing both domestic and offshore funds into the housing sector; linking the capital market with the housing industry, establishing and operating a viable secondary mortgage market to support the primary mortgage market and collecting and administering the NHF contribution with the provisions of the NHF Act, the FMBN has no other option than to remain a key player in the transformation agenda.

To surmount the various challenges in the sector, particularly the housing deficit, the FMBN has initiated projects like the delivery of about 53,000 houses through the NHF launching of housing scheme for the informal sector, Estate Development Guarantee (EDG) scheme among others.

Kumo explained that ‘’the Informal Sector Cooperative Society Loan Scheme, as a  mortgage product, would enable operators in the informal sector like farmers, traders, artisans etc to benefit from the National Housing Scheme like those in the formal sector”.

According to him, the loan the bank gives enables a cooperative society that has acquired a plot of land to develop houses for allocation to its members, adding, “the parcel of land would have title in the name of the society which would act as facilitator on behalf of its members in the loan transaction and which would facilitate construction of the housing units; the root of the title of the estate land would be subleased to the beneficiaries.’’

Article Credit: Businessdayonline

Updated 3 Years ago
 

Find Us On Facebook

Tags:     Nigerian Gross Domestic Product     Federal Mortgage Bank of Nigeria     NHF     Kumo

RELATED