Automation of FMBN processes 80% complete – MD

The move by Federal Mortgage Bank of Nigeria (FMBN) to ensure full automation of its processes and help reduce the transaction cycle of the National Housing Fund (NHF) has reached 80 percent completion.

Managing Director, FMBN, Mr. Gimba Yau’ Kumo, disclosed this recently when the new executive council of the Mortgage Banking Association of Nigeria (MBAN), led by the President, Mr. Femi Johnson, met with top officials of FMBN. He noted that with this development, the NHF transaction cycle will be less than 90 days, adding that workshops and/or training programmes are being planned for primary mortgage banks (PMBs) to work towards a shorter transaction cycle for NHF process.

Yau’ Kumo’s statement was in response to a call by Johnson, the MBAN president, who  urged FMBN to fast track the automation of NHF process, saying  “there is the dire need to conclude Automation Process of the NHF Scheme, very quickly.” Johnson also called for the resuscitation of the quarterly meetings of the technical committee in order to resolve issues arising on the scheme on a continuous basis.

MBAN called for the deepening of the NHF scheme, adding that making PMBs the engine room of the monthly collection process, shortening transaction cycle time, placing the funds with PMBs and prompt disbursement of approved NHF loans will help address the issue of paucity of funds in the country’s mortgage sector.

Responding to the requests made by MBAN, Yau’ Kumo said there is need to first tackle the case of those PMBs that had commenced collection of NHF but may not meet the December 31, 2013 deadline set by CBN for consolidation/reforms of the sector.

He also said that the issue of placement of funds as deposits with PMBs would be fully addressed after the consolidation, noting that FMBN recently had a swap transaction with a PMB and found it difficult to recover the fund at maturity. He said the apex mortgage bank also wants to avoid the incidence of its N1billion trapped in Savannah Bank some years ago.

The NHF is a Federal Government introduced scheme, to which all public servants and employees in the organised private sector, aged 21 years or above, the country are expected to contribute 2.5 percent of their monthly salary to FMBN as managers of the fund.

Employees of various corporations who are active contributors to the scheme, can access the fund from FMBN through the accredited PMB of their choice. amount of loan obtainable under the scheme is N15 millionat the rate of 6 percent interest repayable over a period of 30 years is obtainable under this scheme.

As at March 2013, available statistic shows that 3.77 million workers had so far contributed N106 billion to the Fund nationwide out of which N101 billion has been disbursed to beneficiaries to enable them build, buy or renovate their houses. The amount was contributed by 28 states while eight states are still not contributing to the fund.