Nigeria Needs N56tr to Meet Housing Needs – FMBN
- By Simeon Ogoegbulem
- Published March 22nd, 2011
- News
- Unrated
NIGERIA needs to deploy a minimum of N56 trillion in order to meet its housing shortfall which the Federal Mortgage Bank of Nigeria (FMBN) has put at 16 million houses.
FMBN said the shortfall in the housing sector of the economy is as a result of “regulatory, legal and environmental challenges over the years.”
Gimba Yua Kumo, managing director of FMBN, disclosed at an interactive session with select editors that with this level of investment, the country would be in a position to remedy and improve on the home ownership rate of 25 per cent. Kumo however stated that the real sector can be developed to account for more than 35 per cent of the country’s gross domestic product (GDP) as obtained in other developing economies.
He regretted that currently, the mortgage sector contributes less than three per cent of Nigeria’s GDP adding that the figure is funded with less than five per cent of the total lending portfolio of banks operating in Nigeria and “just 13.5 per cent of the mortgage lending by primary mortgage institutions (PMIs).
Kumo however observed that in spite of the grim data, Nigeria as an emerging market is ripe to realize its potential in mortgage delivery. He assured that under the new strategic plan of FMBN, housing finance would be sourced from a variety of funding windows. He stated that this strategy would ensure that “Nigerians live in descent and affordable homes”.
Kumo assured that plans are underway to raise the bank’s capital base to N100 billion. There are also plans for an annual capital injection of N250 billion over the next two years. As part of efforts aimed at ensuring faster delivery of houses to Nigerians, he stated that the Estate Developers Loan (EDL) would now be disbursed in three tranches of 40 per cent, 30 per cent and 30 per cent.
According to him, the new policy shift is “intended to enable estate developers to have more liquidity and be in a position to complete their housing projects at a faster rate. Under the new initiative, developers are expected to complete at least 40 per cent of their projects before coming for the second tranche of their loans.
FMBN said the shortfall in the housing sector of the economy is as a result of “regulatory, legal and environmental challenges over the years.”
Gimba Yua Kumo, managing director of FMBN, disclosed at an interactive session with select editors that with this level of investment, the country would be in a position to remedy and improve on the home ownership rate of 25 per cent. Kumo however stated that the real sector can be developed to account for more than 35 per cent of the country’s gross domestic product (GDP) as obtained in other developing economies.
He regretted that currently, the mortgage sector contributes less than three per cent of Nigeria’s GDP adding that the figure is funded with less than five per cent of the total lending portfolio of banks operating in Nigeria and “just 13.5 per cent of the mortgage lending by primary mortgage institutions (PMIs).
Kumo however observed that in spite of the grim data, Nigeria as an emerging market is ripe to realize its potential in mortgage delivery. He assured that under the new strategic plan of FMBN, housing finance would be sourced from a variety of funding windows. He stated that this strategy would ensure that “Nigerians live in descent and affordable homes”.
Kumo assured that plans are underway to raise the bank’s capital base to N100 billion. There are also plans for an annual capital injection of N250 billion over the next two years. As part of efforts aimed at ensuring faster delivery of houses to Nigerians, he stated that the Estate Developers Loan (EDL) would now be disbursed in three tranches of 40 per cent, 30 per cent and 30 per cent.
According to him, the new policy shift is “intended to enable estate developers to have more liquidity and be in a position to complete their housing projects at a faster rate. Under the new initiative, developers are expected to complete at least 40 per cent of their projects before coming for the second tranche of their loans.
