As FMBN Repositions for Efficiency

By Abimbola Johnson – 

Never since the advent of the Nigerian Building Society in 1956 or its re-christening as the Federal Mortgage Bank of Nigeria in 1977 or the promulgation of the Mortgage Institutions Act (1989) and the FMBN Act 82 (1993), in 1994, when the FMBN was accorded the status of the apex mortgage institution in the country, has the housing deficit in the country more daunting than now.

Unlike many other countries with similar challenges, an estimated 80percent (or over 130 million) of Nigerians live in indecent, informal housing structures with no basic amenities and in deplorable conditions. Only few own the house that they live in. The housing deficit of Nigeria, according to the World Bank, is estimated at a whopping 17 million units.

In densely populated commercial and urban centres such as Lagos, Abuja, Port Harcourt and Kano, squatters outnumber those decently accommodated. The same World Bank, value the cost of the 17 million housing deficit at about N59.5trillion. Yet another informed stakeholder: a two-time member of the House of Representatives, who was also Minister of Sports and now President of the Association of Professional Bodies in Nigeria, Bala Ka’oje only last Monday, tasked the Muhammadu Buhari administration to make available to the FMBN a bailout fund of N100bn (one hundred billion naira) as well as “overhaul and restructure the Federal Mortgage Bank of Nigeria (FMBN) for effective housing delivery”.


Already the restructuring of FMBN is on-going and the new team headed by its Managing Director, Mr. Richard Esin in not leaving any stone unturned. If snippets from the team’s activities are anything to go by, it seems the burden on the supervising minister for Hosuing, Mr. Babatunde Raji Fashola, would be less in the way they are strategically addressing the challenges of housing deficit inherited by this administration.

While it cannot be denied that funding is a major challenge of the housing sector, it requires leadership, the right policy and its effective implementation, as well and sincere and efficient deployment of resources to bridge the housing deficit in the country.

There is no gainsaying that the provision of housing transcends the mere provision of shelter. It facilitates urban development and at the same time promotes the socio-economic well-being of a people especially when tailored towards the attainment of home ownership. 

Shelter is not only a basic need of life, housing is the right of every woman, man, youth and child to acquire and a desideratum for sustaining a secure home, family life and community and to live in peace and dignity.


The right to housing is codified as a human right in the Universal Declaration of Human Rights:

“Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.” (Article 25(1))

Affordable housing is housing for which the associated financial costs are at a level that does not threaten other basic needs. States should take steps to ensure that housing costs are proportionate to overall income levels, establish subsidies for those unable to acquire affordable housing, and protect tenants against unreasonable rent levels or increases.

Nigeria is a peculiar country where mortgage finance (as a share of GDP) is extremely low. At a paltry 0.5%, compared with 80% (UK), 77% (USA), 31% (South Africa) and 2% (Ghana), it is a huge joke. The housing and construction sector account for only 3.1% of Nigeria’s rebased GDP. Housing production is at approximately 100,000 units per year while 800,000 units are needed yearly.

As a result of this lack of a robust mortgage financing system, Nigeria’s rate of home ownership is one of the lowest in Africa at 25%. Statistics show that Nigeria’s homeownership rate is much lower than countries like Singapore (90%), Indonesia (84%), Kenya (73%), USA (70%), Benin Republic (63%) and South Africa (56%).


In addition to these obstacles to home ownership, Nigerians face daily battles with poverty, unemployment, low human development index (HDI), low access to clean water and improved sanitation and incessant power outages. A large percentage of Nigerians are unbanked as only about 40% of the adult population is financially included.

One is therefore gratified about the current restructuring of the FMBN, embarked upon in that sector by Buhari when he brought in Mr. Richard Esin. A man of few words, he has accepted the responsibility to deliver on the mandate of the bank and carry forward the modest achievements of his predecessors.

A snapshot into his four months’ stewardship can be gleaned from his account at the ongoing 15th Lagos Housing Fair. Speaking through Mr. Yusuf Yinusa, the Lagos Zonal Coordinator of the bank, he reported how the National Housing Fund, NHF, has hit N191.9billion in March from 4.14 million registered contributors under scheme.

Esin also said that N5.9billion had been refunded to 118,284 individuals who met conditions for refund, while over 70 per cent of the cumulative collection was recorded in the last five years.

Section 14(2) of the NHF Act of 1992 stipulates that a contributor to the NHF can access a loan from the fund for the purpose of building, purchasing or renovation of existing homes /houses. If this is made truly compassionate, with security and opportunity at its heart, the nation will be inching towards affordable shelter.

As Nigerians look forward to the concessionary loan windows promised by Esin to enable them access mortgages for home ownership at affordable interest rates, it is laudable that the NHF managed by the bank has financed the construction of about 25,606 housing units and advanced 16,506 mortgage loans.


While disbursements are pending, according to the Acting MD, for the delivery of additional 15,085 housing units and 10,726 mortgage loans, the bank has already entered into partnership with the Federal Housing Authority (FHA); Assets Management Company of Nigeria (AMCON) and state governments to ensure that the challenges of lack of access to land, inadequate funding for the housing sector, inaccessibility of mortgage loans due to lack of proper title to properties, low income of prospective borrowers which affects affordability, cumbersome procedures for obtaining governors’ consent to land transactions which is also costly, are addressed.

Laudable as Mr. Esin’s prognosis have been, I hasten to say that conceptualisation of some quick wins that would allow a greater number of Nigerians access to the bank’s FMBN HOME RENOVATION LOAN (FHRL), to renovate or improve existing properties which are personally owned by them or through family ownership, will become visible with continued efforts of the repositioned FMBN and stateholders.

In all these, however, a greater challenge has been identified: communicating the NHF to both its contributors and other stakeholders in the housing sector for greater participation and increased success in delivering affordable mass housing to the Nigerian populace. Esin must therefore design and implement a sincere communication strategy that we can hold him accountable to.

Ms Johnson is the editor of The Whistler Newspapers (
[email protected]


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