When the National Housing Fund (NHF) scheme was set up by an Act Act of Parliament—act No 3 of 1992, it came as a child of necessity, serving as a pool of long-term funds and solution to the poor funding structure of the Nigerian housing finance system.
As a housing finance solution, the fund addresses major challenges of cost and tenor of funds. Though it was set up primarily for mortgage lending, the fund has evolved, over the years, to provide other forms of Housing Finance based on customer/market needs such as construction financing, housing micro-financing, rent to ownership, etc.
By law, the federal mortgage bank of Nigeria (FMBN), which is the apex mortgage bank in the country, is empowered to collect, manage and administer the NHF scheme.
Not until 3 years ago, the 28-year old scheme had remained a fledgling with underperformance in almost all its key performance indicators.
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But there had been challenges bordering on non-compliance by institutional investors such as banks and insurance companies, workers coverage such that only five million are registered out of 90 million national working population.
However, the relatively new management at FMBN has introduced new innovations in the operations of the fund that are not only addressing the fund’s legacy challenges, but also changing its story.
“On assumption of office in 2017, we presented a proposal to Central Bank of Nigeria (CBN) for consideration by Bankers’ Committee for riskbased investment in NHF,” Ahmed Dangiwa, FMBN’S managing director and chief executive said at an international housing show in Abuja recently.
Dangiwa disclosed that there are on-going efforts to review the NHF & FMBN Acts, adding that the apex mortgage bank was part of an advocacy for states’ adoption of Model Mortgage and Foreclosure Law (MMFL).
“We are part of an advocacy for reduction in property transaction costs; we have created an Internal Records Office (IRO) to bridge delays in mortgage origination; we have automated our business processes and also improved our operational turnaround time,” the CEO said.
Besides the introduction of new innovative products to match various housing finance needs, FMBN has also increased NHF mobilisation and sensitisation to a point where 29 states of the federation have now keyed into the scheme.
Dangiwa said they have also introduced a Help Desk and IT platforms for customer relations; hooked on to a wider print and electronic media channels to provide information on their operations/
“We have also embraced backward integration into financing of housing construction to develop the primary mortgage market, and we are determined to deliver, at least, one housing estate in 36 states of the federation and the federal capital territory, Abuja,” he informed.
The result of these efforts, the managing director stressed, is the improvement in operational performance which the fund has seen in the last three years.
Dangiwa noted that the housing fund has recorded significant progress over the past three years, pointing out that, among other things, it has increased the number of contributing states by 17 percent to 29, up from five it was before 2017, giving a total of 34 states that have joined the scheme.
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The number of registered contributors has also increased from 4,539,084 in April 2017 to 5,060,967, meaning that between April 2017 and May 2020, 521,883 new contributors joined the scheme, showing a 12 percent increase in just three years.
Similarly, NHF collection grew by 69 percent to N392.6 billion, up from N232.8 billion as at April 2017, meaning that additional collection of N159.70 billion was made between April 2017 and May 2020.
From 1992 to April 2017, the scheme refunded contributors a total of N10.83 billion while N23.924 billion was refunded between April 2017 and May 2020, showing about 221 percent increase.
Beneficiaries of the refund say it is a new dawn in the apex mortgage bank. Yahaya Ajala Umar of the Federal Ministry of Labour and Employment, Abuja is one of the lucky contributors. Others are Abdullahi Kaoje Mohammed of Federal Ministry of Industry, Trade and Investment, Abuja, and Sulaiman Yahaya of Sir Yahaya Memorial Hospital, Birnin Kebbi, Kebbi State.
“This is the first time contributors are getting a refund without much stress and we thank Architect Dangiwa and his team for the good work they are doing,” Umar said, hoping that this would continue to be the norm going forward.
In 25 years, the fund disbursed to contributors N52.453 billion while in three years it disbursed N98.274 billion, showing 64 percent increase that gave a total disbursement of N250.721 billion in 28 years.
Based on these improvements in its performance indicators, Dangiwa noted that they were looking at the future of the fund with optimism and are, therefore, encouraged to introduce new products plan for Diaspora mortgage loan and finance student hostel construction.
“NHF opportunities to finance housing finance in Nigeria are endless; with compliance by institutional investors, full coverage of the local working population and integration of the Diaspora market, annual collection can total over N400 billion,” he said, adding that this sum could deliver over 53,000 new homes per annum , and also give over 800,000 housing micro-finance loans
