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Sunday, December 4, 2022

Stakeholders Applaud PENCOM Over Approval For Workers To Use RSA For Mortgage

Experts and Stakeholders in the built and mortgage sector have commended the decision of the National Pension Commission to allow workers use 25 per cent of their Retirement Savings Accounts as mortgage.

PenCom had in a statement on Friday, September 23, 2022 announced that it has approved the issuance and immediate implementation of the guidelines on accessing RSA balance towards payment of equity contribution for residential mortgage by RSA holders.

The statement read in part, “PenCom is pleased to inform all stakeholders and the general public, particularly RSA holders, that the commission has approved the issuance and immediate implementation of the guidelines on accessing RSA balance towards payment of equity contribution for residential mortgage by RSA holders.

“The approval is in line with Section 89 (2) of the Pension Reform Act 2014, which allows RSA holders to use a portion of their RSA balance towards payment of equity for residential mortgage.”


Reacting to this new policy, the Executive Secretary and Chief Executive Officer of Mortgage Banking Association Of Nigeria(MBAN), Kayode Omotosho expressed his delight that the “novel idea has finally become a reality”.

Giving an insight as to how this policy was birthed, he said, “It commenced silently as an advocacy issue with PENCOM that originated from MBAN; which thereafter was escalated to full Advocacy issue by Stakeholders on the Platform of the Former Nigerian Housing Finance Program (NHFP).

“However, all the continuous efforts were in the last few months finally coordinated with PENCOM by FSS2020 and MBAN which culminated into the Broad Guidelines issued by PENCOM on the idea.”

While congratulating Nigerians in general and those who have particularly worked to ensure the new policy see the light of day, he noted that there is still more to be done to ensure smooth implementation.

He said, “… its breadth and depth would only be fully achieved with the Setting up and Take-Off by the NIGERIA MORTGAGE GUARANTEE COMPANY (NMGC), a Credit Enhancement Initiative that is currently being finalised by FSS2020, NMRC, MBAN/MORTGAGE BANKS for Nigerians to take the fullest advantage of the Four-some  Mortgage Banking Sub-Sector Institutions of NMRC, NMGC,  MWFL 25% RSA CONTRIBUTION FOR MORTGAGE EQUITY.

Also, Mr. Adedeji Jones Adesemoye, a retired Deputy Director at the Central Bank of Nigeria (CBN) said the new policy was very commendable. He also praised the various provisions of the policy which would make it easier for couples and even those whose 25% RSA is not sufficient for down payment for mortgage.

He said, “It’s a very commendable policy and joint equity contributions of husband and wife for mortgages is now also available. There is also supplementary opportunity through voluntary contributions for those whose 25% RSA is not sufficient for equity down payment for mortgage.”

He however warned Nigerians not to abuse the privileges and that serious guidelines should be put in place to ensure smooth implementation.

His words, “The policy should not be abuse however as 25% is significant in pension benefits, therefore the implementation should be guided by strong underwriting requirements as provided in the Uniform Understanding Standards ( UUS) developed for the industry.”

Similarly, Africa’s leading and pioneer housing advocacy group, Housing Development Advocacy Network (HDAN) has commended the initiative.

According to Festus Adebayo, Executive Director HDAN, the new policy is a product of collective advocacy and the success should be considered as a call to duty as more needs to be done in the housing and mortgage sub sector.

His words, “I on behalf of HDAN commend this giant stride. It is as a product of collaborative advocacy. We urged stakeholders in the housing / mortgage sub sector to do more.”

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