By Uche Usim
When Richard Esin, was recently appointed the Acting Managing Director/Chief Executive of the Federal Mortgage Bank of Nigeria (FMBN), he knew his task was to grow the bank’s fortunes despite the economic recession.
Esin, a seasoned banker with over 25 years experience has since rolled up his sleeves to tackle funding and other challenges facing the bank head on. In this interview with Daily Sun, recently in Abuja, Esin said his priority was to address the estimated 17 million housing deficit in the country.
He encouraged Nigerians to leverage the numerous house acquisition products packaged by FMBN.
Esin founded and served as Chief Exexutive Officer of Prome Limited, a training and consulting company before he was appointed an Executive Director in Federal Mortgage Bank of Nigeria and then Acting CEO.
He holds a Bachelor of Science degree (Hons) in Accounting, a Master’s degree in Business Administration, and another Master’s degree in Analysis, Design and Management Information Systems from the London School of Economics, London.
In this interview, he speaks more about the bank, the National Housing Fund (NHF), how Nigerians can access loans.
Forum with Police
First and foremost, it is a continuation of our stakeholders engagements. Federal Mortgage Bank is the manager of the National Housing Fund (NHF), which is a contribution by the Nigerian workers and the organisations where these workers serve. So, we try to know those who have issues and then engage them to know what the issues and resolve them. It is also a way of deepening a relationship that has been there from inception of the fund and like I said earlier on, the Nigerian police is our biggest contributor. So from time to time, we have to engage and interface with them. We definitely have to engage to build a better relationship and deepen existing relationship. Of course, we also have engagements with other relevant stakeholders.
Addressing Nigeria’s 17m housing deficit
We have a couple of products being used to drive mass housing. The flagship of these products is the National Housing Fund mortgages or loans, which is available to Nigerians at 6 per cent per annum, with a tenor of up to 30 years depending on the your age when you accessed the loan. We have even extended the loan for applicants that want to acquire houses that are funded by the Federal Mortgage Bank. This we did by providing a layer of opportunity. The current process of capitalising the equity contribution and perfection fees for mortgages of N5 million and below will enable a lot of Nigerians to come into the process of owning their own homes. It is almost like the collapse of any entry barrier. We have also told the Police to take advantage of the new opportunity.
Accessing FMB loans
We don’t deal directly with potential mortgagers. You deal with us through partner mortgage banks. Again, the procedure or the process of accessing these loans is clearly spelt out on our website.
Refund of NHF contributions
There are conditions for the refund of NHF contributions. It is made to a contributor who has attained the age of 60 years of age or has put in 35 years in service. It is also made to a contributor that has obtained loan, liquidated the loan and has attained the age of 60 years or have put in 35 years in service. Refund is made to a person who has retired from employment and becomes incapable of continuing the contribution to the fund. It is also made to the next-of-kin of the deceased contributor. The documents required include: the application letter requesting for refund of contribution, letter of offer of appointment, photocopy of retirement letter, letter of introduction from former employer, birth certificate or Declaration of age certificate. The completed NHF Contribution withdrawal forms is to be supplied by FMBN, the NHF passbook, bank account details through which refund would be paid, medical Report of incapability to continue contributions due to failing health, letter of administration and death certificate, in case of a deceased contributor.
Funding! I say again, funding. It’s really a big challenge. Like I said, we have about 17 million housing deficit in the country. Even if you were to do 100,000 mortgages a year at N5 million, the funding requirement is huge. Work out the numbers.
Any hope for Nigerians?
There is. Surely, there is. It is a government with a change agenda and priority is on job creation and housing. Definitely, there is hope for the common man in Nigeria.
Yes! Shelter Afrique is coming with funding arrangements being fine-tuned for the Nigerian market. We have finalised work on the MOU and we should be signing that within this quarter or next quarter. It’s something in the region of $150 million. I don’t have the actual figures. But it’s quite big.
People have a lot of misconceptions about the NHF. The NHF is not the same as National Housing Programme (NHP). Again, the Federal Mortgage Bank of Nigeria (FMBN) is different from the liquidated Federal Mortgage Finance Limited (FMFL). I must also stress that interest rate is fixed and does not change throughout the duration of the loan and your contribution qualifies you for NHF loan irrespective of the amount contributed. Above all, the NHF is not a scam! It is real.
Aims and objectives
The NHF has its aims and objectives. First and foremost, it serves as the mobiliser of funds for the provision of affordable residential houses for Nigerians. It also provides loans to Nigerians for erecting, purchasing or renovating houses.
It’s to encourage programs that would enhance housing financing among low and medium income earners. The fund is also to service the non-salaried informal sector and provide long-term loans to mortgage institutions for lending to contributors of the fund.
The NHF is loaded with benefits. It provides housing loan of up to 90 per cent of the cost of the house. Interest on loans remains fixed throughout the life of the mortgage at 6 per cent per annum. In NHF, you enjoy long period of repayment of up to 30 years and contributions can serve as additional old age security. You can borrow up to N15 million., while refunds is 2 per cent interest on retirement. Besides, loan repayment is about the same as a typical monthly rent and every contributor has a lifetime registration number and a passbook for personal recording of contributions. Then a contributor has an account statement.
Advice to Nigerians
Owning a home is good thing and in advising the teeming Nigerians to own one, I would say the first thing is to work hard, and next you make sure you have a steady income line, because that is key in mortgage appraisal and more importantly, obey the rules of the game. When you finally have the mortgage, ensure that you are your repayments are up to date.
Future of housing
The future of housing in Nigeria is very bright. It is still a virgin land. Like, I said earlier on, there is a 17 million units housing deficit in the country. It is an investors’ haven if you ask me.
First and foremost, we need to work hard. In working hard, we also need to play by the rules. I inherited the Federal Mortgage Bank not in good shape but we have been able to put certain things in place to drive the body to the next level.
Like any bank in a recessed environment, we just have our challenges and we are facing them one at a time. We will get there.
I have been a banker virtually all my life. In fact, for almost 25 years now. So it can only get better.