Report: Urgent Call for Federal Mortgage Bank of Nigeria Recapitalization
Operators within the construction sector have emphasized the critical need for the recapitalization of the Federal Mortgage Bank of Nigeria (FMBN).
Toye Eniola, the Executive Secretary of the Association of Housing Corporations of Nigeria, highlighted in an exclusive interview with The Entrepreneur TV, the inevitability of FMBN’s recapitalization in light of the current economic climate.
Eniola stressed, “With the escalating costs of building materials and construction, there is a pressing need for increased funds within the system. Recapitalization is essential to enable FMBN to provide sufficient mortgages to support affordable housing initiatives and foster a robust mortgage market in Nigeria.”
He further explained, “While FMBN loans currently offer a favorable single-digit interest rate of six percent, recapitalization will not directly impact this rate due to its legal backing. However, it’s important to recognize that recapitalization alone cannot ensure single-digit interest rates across the broader mortgage market, as government lending rates and capital market dynamics also play significant roles.”
Abdulfatai Garba, a realtor with eXp Realty LLC, echoed Eniola’s sentiments, emphasizing the role of FMBN recapitalization in advancing affordable housing objectives.
Garba stated, “Given the government’s commitment to providing affordable homes, revisiting and amending laws and policies to recapitalize FMBN is crucial. While recapitalization may not immediately result in single-digit loans nationwide, it promotes competition among lenders, encouraging them to improve their offerings. As seen in the airline industry with Air Peace, competition drives providers to enhance services and lower prices, ultimately benefiting consumers, particularly ordinary Nigerians.”
The urgent call for FMBN recapitalization underscores the sector’s recognition of its pivotal role in addressing Nigeria’s housing challenges and promoting economic growth.
