How 12-month transformative footprints at FMBN signpost promising future

A peep into the current operations and management of the Federal Mortgage Bank of Nigeria (FMBN) shows, clearly, that a Daniel has come to judgment. The strong footprints that the new management of the bank has left on the sands of time in the last 12 months are a testament that the present is as exciting as the future is promising, writes CHUKA UROKO.

Homeownership in Nigeria for renters and buyers alike is, increasingly, becoming a tall dream due to the vagaries in the country’s economy. But the Holy Book is right, saying that there is time for everything.

For home seekers, time has come to hope and do so positively. And for the federal mortgage bank of Nigeria (FMBN), change has come after over three decades of almost groping in the dark with its mandate of catalysing homeownership for Nigerians.

In the last 12 months, a lot has happened in the apex mortgage bank that has left observable footprints that signpost a promising future not only for the institution, but also hapless Nigerians in dire need of homes.

Over the last decade or more, consumer products origination by mortgage institutions at both primary and secondary levels has been faint and distant. But this narrative has changed considerably by the new management of the FMBN that has Shehu Osidi as managing director and chief executive.

Determined to pursue the bank’s mandate of providing innovative housing solutions to Nigerians, the new management has, within the last 12 months of assuming office, introduced some new products, recognizing it as a task and placing it at the front burner.

The products are designed to cater to the diverse needs of Nigerians and to expand access to affordable housing. The new products are the Diaspora Mortgage Loan, Rent Assistance Loan and Non-Interest Loan.

“In order to deepen financial inclusion and expand access to affordable mortgage finance for homeownership, we sought and obtained CBN’s approval for the commencement of non-interest mortgage loans for the teeming segments of our population who are desirous of ethical products,” Osidi explained at his stock-taking conference in Abuja.

Read also: A year of transformation: Osidi’s leadership and FMBN’s journey towards affordable housing

The new products are also aimed to drive financial inclusion and homeownership and to expand access of more Nigerians to affordable housing products.

Rent Assistance Loan, according to the managing director, is a soft loan to enable contributors to national housing fund (NHF) meet rent obligations pending when they are able to own their own homes. The product, which will be launched within the first quarter of 2025, is specifically designed for Nigerians who are averse to interest payment, particularly those who are of low and middle-income status.

Osidi explained further that the Diaspora Mortgage Loan is a strategic collaborative initiative between FMBN and the Nigerians in Diaspora Commission (NiDCOM) and is expected to open up opportunities for Nigerians living abroad to invest in real estate back home in Nigeria.

“There are ongoing engagements between the Bank, NiDCOM and the Central Bank of Nigeria (CBN) aimed at ensuring seamless transaction processes. International Money Transfer Operators (IMTOs) are also being engaged to facilitate smooth transactions, with plans for a full rollout of the product in Q1 2025,” Osidi said.

Expectation in the housing and mortgage sector is that given what has been done by the new management of the bank, the future has a lot in stock that makes it promising more than ever before.

Over the last one year, the new management has demonstrated a clear vision, strategic innovation and measurable achievements that have significantly improved the bank’s operations, expanded its reach and strengthened its impact on the housing sector.

The bank has focused on delivering key housing projects, improving access to mortgage financing, expanding the NHF scheme and driving digital transformation to enhance service delivery.

It is on record that, within this period, the bank recorded an operational surplus of N11.58 billion based on the management accounts for 2024, making it the first of such experience since the bank came into existence over 30 years ago.

NHF operations had been a daunting task for this bank but in the course of last one year, collections under this fund grew by N3 billion, resulting in total collection of N103 billion, compared to the N100 billion the Bank recorded in 2023.

“This increase demonstrates renewed trust and participation in the NHF scheme by Nigerian workers. To illustrate the improvements, a total of 658 employer-organizations and 178,619 employees were registered in 2024 compared to 556 and 113,577 respectively in 2023,” Osidi noted.

Another significant milestone the management recorded within this period was the digitization of the bank’s operational processes involving the deployment of digital platforms like the Core Banking Application (CBA).

This has significantly reduced bureaucratic bottlenecks such that loan applications are now processed online, ensuring faster and more transparent service delivery. It is a shift that has also enhanced the bank’s ability to monitor and evaluate its operations, leading to better decision-making and resource allocation.

“Today, I am delighted to announce that majority of our transactions are being conducted under Core Banking Application (CBA) to streamline our operational processes and improve service delivery,” the managing director said.

For a federal mortgage bank whose capital base is below N3 billion, the high incidence of non-performing loans (NPL) is a huge burden weighing heavily on its operational efficiency and profitability which was why on inception, the new management resolved to tackle it.

It stands to their credit, therefore, that following the setting up seven Recovery Task Teams to recover delinquent loans across the country’s geo-political zones, the bank was able to recover N10.9 billion that were considered bad loans.

Read also: In push to enhance revenue FMBN registers 178,619 employees for NHF

“This is in addition to our normal recovery activities which also yielded N3.1billion in 2024. The executive management has also been able to resolve several long-standing NPL cases five of which currently await final board/ministerial approval for exit,” he said.

With all these and the significant progress it has made in financial stability and operational efficiency, the bank and its management have come up with ambitious projections into the future with 2025 as its starting point.

The management hopes that building on the progress already made, a lot more will be achieved in 2025, citing NHF collections which are targeted to increase to N211.33 billion, as the bank will be leveraging contributions from the informal sector and the diaspora community.

It is expected too that mortgage loan offerings will expand with new products targeting a total of 4,200 homeownership loans; 2,500 dedicated to non-interest Rent-to-Own facilities; 1,100 for Mortgage Loan Origination, 400 as Rent-to-Own facilities and 200 Diaspora Mortgage Loans.

The bank also targets a total of 15,122 home construction loans, focusing on mega and mini city projects, as well as provision of 43,000 housing micro-soft loans in Home Renovation, Rent Assistance and Micro Home Improvement Loan.

Looking into the future, which the bank sees as promising, the Osidi-led management says it is poised for further growth in 2025, assuring of its commitment to expanding homeownership opportunities for Nigerians.

They described the past one year as a period of transformation and growth characterized by measurable achievements in housing delivery, mortgage loan accessibility, digital transformation, and institutional reforms.

According to them, through Osidi’s visionary leadership, the bank has been able to achieve significant milestones in disbursements, service delivery, strategic partnerships, product development, and affordable housing delivery.

They added that these achievements have not only strengthened FMBN’s position as Nigeria’s leading mortgage finance institution, but also improved the lives of thousands of Nigerians by providing them with access to decent and affordable housing.