Towards Reducing Housing Deficit In Nigeria

Towards Reducing Housing Deficit In Nigeria
July 08 04:51 2014 Print This Article

By Benjamin Orisemeke

With a population of about 170 million people, Housing in Nigeria has continued to be a major issue that successive government have failed to effectively tackle.

Despite the various policies, Nigeria housing deficit continues to rise.

According to figures released by the Federal Mortgage Bank of Nigeria (FMBN), the country’s current housing deficit stands at over 16 million.

In 1992, the National Housing fund (NHF) was introduced by the Federal Government and all public servants and employees in the organised private sector within the country were expected to contribute 2.5% of their monthly salary to the Federal Mortgage Bank of Nigeria, managers of the fund. Employees of various corporations who are active contributors to the scheme, can access the fund through Union Homes Savings and Loans Plc.

An applicant is expected to collect a maximum of N5 million at a 6 percent interest rate repayable over a period of 30 years.

Part of requirements for the National Housing Fund (NHF) Loan Scheme includes account relationship with Union Homes, be a contributor to the fund for at least six months and have satisfactory evidence of regular flow of income to guarantee the loan amongst others.
Past efforts by FMBN through the contributory payment by workers failed to yield the desired result as the process was characterized by fraud.
All that is soon to be a thing of the past as there is concerted efforts from all stakeholders to solve this herculean task.

In order to ensure transparency in remittance of deductions made by the employers from employees’ salary into their account, the Federal Mortgage Bank of Nigeria (FMBN), introduced an electronic platform for the collection of National Housing Fund (NHF), deductions from employers of labour.

The device simply called the NHF e-collection platform makes it possible for NHF deduction, collection and remittance to be done electronically by all designated commercial banks in Nigeria through their existing information technology structures.

Recently at the commissioning of the Aviation Village in Abuja by President Goodluck Jonathan, Managing Director of the FMBN, Alhaji Kimba Yau Kumo disclosed that since the introduction of the National Housing Fund (NHF) e-Card collection to the fund has improved by more than 500 percent which translates into N134 billion and has also assisted to ensure transparency and accountability.

The project being financed by the Federal Mortgage Bank of Nigeria (FMBN) affirms Government’s decision to reform housing and bridge the large deficit, he noted.

He said, “The NHF e-Card being launched today is a huge step forward in delivering the advantages of speed, accuracy, transparency, accountability and superior customer experiences to NHF contributors.

“Mr. President would be pleased to know that we have begun to harvest the benefits of the NHF e-Collection Platform, especially in the volume of NHF collections. For instance, the rate of NHF collections rose significantly from about N700 million to over N2.2 billion per month. We estimate a further 100% increase in monthly collections to achieve about N4 billion per month before the end of Year 2014.

“The Bank in June 2013 launched the NHF e-Collection Platform to ensure proper record-keeping, transparency and accountability for NHF collections.

The platform will put an end to the flagrant violation of the NHF Act and unlawful practices by employers who have over the years failed to effect statutory deductions, remit deductions to the FMBN or provide remittance schedules by which contributors’ monies are easily misappropriated.

The NHF e-Card will serve dual purposes. Firstly, it serves as an Identification Card (ID) as it carries the name, participation number and passport photograph of every registered contributor. Secondly, it enables a contributor access record of his/her contributions using any of the IT channels such as ATMs, Point-of-Sale (POS) terminals and the internet.

By using the NHF e-Collection Platform web portal, a contributor can review his/her record of contributions online and print out a statement of account at a computer workstation from anywhere in the world. In addition, contributors can use the NHF e-Card as an e-Purse that can be loaded with extra cash to make purchases via POS
terminals or online. The portion of funds being NHF contributions will however not be available for spending.

NHF e-Collection Platform is just one of several initiatives and achievements the current Management of FMBN has recorded. Other notable ones are: a 65% growth in cumulative NHF collections and a 42% growth in total loan disbursements within just 32 months; a 196% increase in NHF refunds to qualifying contributors; and the introduction of the Informal Sector Housing Cooperative Scheme to provide mortgage services to non-salaried workers who constitute over 85 percent of the country’s working population.

Already, the bank may have begun to harvest the benefits of the NHF e-Collection Platform, especially with the volume of NHF collections. For instance, the rate of NHF collections rose significantly from about N700 million to over N2.2 billion per month. We estimate a further 100% increase in monthly collections to achieve about N4 billion per month before the end of Year 2014.

FMBN’s ability to deliver will further be boosted by the knowledge that it has reliable allies in the newly established Nigerian Mortgage Refinancing Company (NMRC) and the Sovereign Wealth Investment Fund to stimulate affordable mortgage financing and reduce the cost of housing in Nigeria.

Furthermore, FMBN is attracting offshore investments in the housing sector from international financial institutions such as ICBC of China, Shelter Afrique, Globus Financial Services of USA, to mention a few; partnership with the Nigerian Employers Consultative Association (NECA), the TUC and NLC for the delivery of 4 million housing units to workers nationwide.

Coupled with that is the National Housing Fund Diaspora Mortgage Loan Scheme which has been introduced by the Federal Mortgage Bank of Nigeria and it is expected to provide housing opportunities in Nigeria to over 15 million Nigerians believed to be living outside the country.

The ‘FMBN Aviation Village’ Housing Estate was developed by Suntrust Real Estate Investment Limited, a private developer based on funding for both construction and infrastructure financing provided by FMBN to the tune of N2.4 billion. It covers a land mass of 11.9 hectares comprises a total of 270 housing units of 144 units of 2 bedroom flats, 50 units of 3 bedroom semi-detached bungalows and 76 units of 3 bedroom detached bungalows.

The Kumo disclosed that the estate was developed by Suntrust Real Estate Investment Limited, a private developer based on funding for both construction and infrastructure by the Bank to the tune of N2.4 billion.

The estate which covers a land mass of 11.9 hectares, comprises a total of 270 housing units of 144 units of 2 bedroom flats, 50 units of 3 bedroom semi-detached bungalows and 76 units of 3 bedroom detached bungalows.

So far, FMBN has approved mortgage loans to 171 NHF contributors to the tune of N1.4 billion, out of which about 20 beneficiaries are occupying their houses presently and Mortgage loans for the remaining 99 units are being processed and would be concluded shortly.

As a further step, FMBN is advancing concessionary mortgages to NHF contributors at 6% interest rate in line with Government’s directive for a single-digit interest rate regime under the present administration’s programme of easy access and cheap housing finance to low-income earners.

Also, the Federal Mortgage Bank (FMBN) is partnering with the Nigeria Police to provide affordable housing for its officers with several projects presently on-going Lagos, Abuja, Kaduna and Kano.

With this and many more, the cry of over 16 million housing deficit in Nigeria will be a thing of the past and jobs will be created on the long run.

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