As the coronavirus pandemic lingers in Nigeria, the effect continues to be felt not only in the health sector, but also in other sector and subsector of the country’s economy,but also the housing and real estate sectors, seem to be under the weight of the pandemic.
With businesses generally experiencing a somewhat lukewarm market and the income of individuals and firms reduced, the payment of rents, rates and loans may suffer defaults,as people concentrate their financial resources on sustaining themselves and their families, making them less likely to fulfil loans and mortgages repayments, and leading to possible recline in the growth of the sector.
Speaking on this current reality, the Executive Director, Loans and Mortgages at the Federal Mortgage Bank of Nigeria, Hajiya Rahimatu Aminu-Aliyu, has reiterated the bank’s commitment and unbending resolve, towards boosting the growth of the housing sector through its strategic and well-thought plans.
Hajiya Aminu-Aliyu spoke as a panellist at a webinar hosted by the Housing Development Advocacy Network (HDAN), with theme “COVID-19: Housing as a Solution- FMBN leading through the crisis.”
According to her, the bank is aware of the situation of the economy, and would do its best, in providing succour, by providing loans and refunds to NHF contributors.
“FMBN will be at the forefront of stimulating growth, in the housing sector through our activities. We will continue to provide loans for real estate construction and provide loans to NHF contributors. Due to the prudent management of NHF resources, we have adequate funds, to meet our own loan applications for the meantime” she said.
Furthermore, she allayed the fears of NHF contributors, with regards resuming full operations and processing of existing loan applications, she stated,“As an institution, we are working hard to resume full operations, as quickly as possible, but our focus will be on loan applications,that are under process so we can conclude and disburse as quickly as possible. This is to therefore assure NHF contributors, with existing loan or refund applications that, we will ensure we conclude their request in good time.”
On the issue of loan repayment, the FMBN Executive Director said “We understand that some borrowers may experience challenges with repayment due to the economic impact of COVID-19 pandemic. For those with NHF mortgage loans, in private and informal sector, we will advise that they talk to their primary mortgage banks on their challenges.
“We are all aware that CBN has taken the initiative to provide Bank loan forbearance measures to ease the burden on customers, who are facing repayment challenges. We also want to follow that initiative since our corporate goal is to provide housing to Nigerians.”
She however admonished loan subscribers,who are able to make repayments,to do so in their best interest and avoid deferring their repayments.
“For borrowers who are still able to make repayment, I will strongly advice that they do continue making regular repayments, as it is in their best interest. Forbearance does not mean that you will not be required to pay. It is only that repayment is postponed at times. This kind of arrangement means additional cost to the customer because the missed repayments are added to future payments.”
Hajiya Aminu-Aliyu pointed out that government as part of its efforts to get things running,in the country,did not default on paying workers’ salaries and therefore no default in expected in this area.
“As we are all aware so far, there is no federal or state agency or parastatal that did not pay its salaries so we expect that in all the formal sectors, all the repayment is made. So far, we have not seen a challenge on the formal sector. So we are expecting that the primary mortgage banks will liaise with the beneficiaries and continue the repayment.”
While commenting on the issue of diversifying the bank’s sources of funds, she stated that “the effort FMBN is making is to see that the bank,can be recapitalized. Our source of funds is from the NHF contributors and we are as much as possible trying to see how we can improve on that source of fund. Away from NHF contributions, other source of income from commercial banks and insurance companies, of which we are trying very much to see how we can access them.”
When asked about the bank’s efforts at recovering non-performing loans owed by defaulting Estate developers, she said “When we resumed office in 2017, we met a huge number of non-performing loans on project,that have been started and been stagnant it was the fault of the contributors that have been held there. The approach we took was to have an interaction with those developers who have at various stages collected money, from FMBN to build and at a point, for one reason or the other, were not able to complete the project.
“On case by case basis, we have been able to largely get some review, some exit and this is what we have been doing since the first and second year we resumed. That is what gave birth to the re-lauching of Rent-to-own because we have had many sites abandoned, some completed some were not completed, we had to complete so that we can get people into the houses without paying a dime. So we have tried as much as possible to get all those loans performing again.”
In addition, she stated that FMBN will not relent in its efforts in creating products that attract investors and also move away from the one digit interest rates, as part of efforts towards allowing the investors make profit and create a win-win playing ground.
