•Shehu Usman Osidi
The Federal Mortgage Bank of Nigeria has over the years been plagued by non performing loans as a result of the quality of credit obtained.
However, the bank has now advanced efforts to recover these non performing loans to boost its operational efficiency, reports Daily Trust.
This has led to the bank also recording an operational surplus in its 2024 management accounts, marking the first time in over 30 years that the institution has achieved such a financial milestone.
“Only recently, the bank recorded an operational surplus of ₦11.58 billion, a first in its 30-year history which is attributed to strategic cost optimisation, improved revenue generation, and a disciplined financial management approach.
“In the past year, through our strategic focus on revenue growth, prudent financial management, and cost-efficiency measures, we reduced operational expenses while maintaining service e. There was improved discipline across the organisation, leading to better utilisation of resources,” the Managing Director of the FMBN, Shehu Usman Osidi stated this recently.
Recovery of non-performing loans
The MD had highlighted how the institution is heavily weighed down by NPLs majorly due to the quality of credit that the Bank used to book.
“Accordingly, we introduced stricter loan appraisal processes to improve credit quality, reduce loan defaults, and enhance recovery mechanisms. Also, in line with this direction, on the 3rd of June 2024, to demonstrate the seriousness attached to the issue of Non Performing Loans, we inaugurated 7 Recovery Task Teams to recover delinquent loans across the country’s geo-political zones.
“As a direct result of this initiative, we have recovered N10.9 billion in bad loans through the recovery teams. This in addition to our normal recovery activities which also yielded the sum N3.1b in 2024. The Executive Management has also been able to resolve several long-standing NPL cases, five (5) of which currently await final Board/Ministerial approval for exit,” he explained.
Deployment of core banking application
The FMBN management also noted that it has commenced the full implementation and completion of the Core Banking Application (CBA) to streamline our operational processes and improve service delivery. It is to be noted that the deployment of this Application had taken too long to conclude before the current Management took over.
The MD had announced that majority of its transactions are now being conducted under the CBA.
“Accordingly, we will be closing out the implementation of the Application by March 31st, 2025, and entering the maintenance phase which will last for 6months from April to September 2025. The successful completion of this project is bound to position the FMBN for more efficient, technology-driven operations.” he said
Boost in NHF collections
Providing insight into the bank’s financial performance, Osidi disclosed that FMBN’s National Housing Fund contributions grew by N3bn in 2024, reaching a total of N103bn compared to N100bn in 2023.
“This increase in NHF contributions demonstrates renewed trust and participation in the NHF scheme by Nigerian workers,” he noted.
He also highlighted the return of Kano State civil servants to the NHF scheme after 24 years, which is expected to boost collections in 2025.
He further stated that a total sum of N71.5bn in loans was approved in the past year, compared to N39.7bn in 2023. The bank also refunded N14.4bn to 44,333 beneficiaries, an increase from N13.2bn refunded to 40,426 beneficiaries in the previous year.
Additionally, the MD announced that “In order to deepen financial inclusion and expand access to affordable mortgage finance for homeownership, the current Management sought and obtained CBN’s approval for the commencement of non-interest mortgage loans for the teeming segments of our population who are desirous of ethical products,”
In line with its mandate to provide innovative housing solutions, FMBN also launched a series of new mortgage products tailored to address diverse homeownership challenges
The Diaspora mortgage loan is a collaboration between FMBN and the Nigerians in Diaspora Commission (NiDCOM) to facilitate real estate investments for Nigerians abroad. With ongoing engagements involving the Central Bank of Nigeria (CBN) and International Money Transfer Operators (IMTOs), the full rollout is expected in Q1 2025.
Also, rent assistance loan is designed to ease the financial burden of rent payments for Nigerians, offering flexible, affordable financing for tenants.
Similarly, the non-interest loan which is a Sharia-compliant mortgage product catering to individuals who prefer non-interest financial solutions, particularly those in the low- and middle-income segments.
These strategic product innovations reflect the bank’s focus on expanding access to mortgage financing and addressing the housing deficit in Nigeria.
Strategic partnerships
Strategic partnership, Osidi noted that partnerships has been reinforced by strategic collaborations across the public and private sectors as the bank has engaged with state governments, labour unions, private developers (through REDAN), and international housing finance institutions to expand its reach and mobilise additional resources.
Notably, FMBN signed a Memorandum of Agreement (MoA) with the Kano State Government, reintegrating Kano’s civil servants into the NHF Scheme—leaving Oyo State as the only state yet to return. The reactivation of Kano’s participation underscores FMBN’s commitment to broadening mortgage accessibility nationwide.
Additionally, the bank is collaborating with Shelter Afrique Development Bank to develop affordable student housing and is in talks with international partners like the International Union of Housing Finance and the African Alliance for Youth Empowerment to explore new funding models.
Resolution of the CBN’s Prudential Guidelines on Single Obligor Limit
The bank further explained that one of the major challenges the new Management was confronted with on our assumption of office was the application of the CBN prudential guidelines that limit FMBN’s lending capacity to Primary Mortgage Banks (PMBs) to 50% of their shareholders funds unimpaired by losses. The impact of this regulation is that it has severely curtailed FMBN’s ability to finance new mortgage loans due to the low capitalization of the PMBs.
“FMBN has argued that the NHF Act which sets the limitation provides that FMBN shall not lend to PMBs more than 50% of their shareholders’ funds unimpaired by losses on an annual basis. The CBN has hitherto insisted on applying this provision on a cumulative basis.” The MD explained.
Subsequently, he stated that “However, arising from our strategic engagement on this issue with stakeholders including the CBN, MBAN and the National Assembly, we believe that we have reached a common understanding with the CBN and a final resolution will soon be achieved to the satisfaction of all stakeholders. At this juncture, we wish to extend our special thanks to the House Committee on Housing and Habitat for their intervention that led to several engagements on the matter and the current near-resolution that will finally put this matter to rest,”
2025 Projections
Building on its achievements, FMBN has set ambitious goals for 2025, including increasing NHF collections to ₦211.33 billion by tapping into the informal sector and diaspora contributions.
The bank also intends to expand mortgage loan offerings to 4,200 homeownership loans, including 2,500 Rent-to-Own facilities, 1,100 Mortgage Loan Origination products, 400 additional Rent-to-Own facilities, and 200 Diaspora Mortgage Loans and also funding 15,122 home construction loans focused on large-scale housing developments.
Similarly, the apex mortgage bank says it will be providing 43,000 housing microloans for renovations, rent assistance, and home improvement and also Recovering ₦93.7 billion in outstanding loans through an aggressive loan recovery drive, just as it intends to establish the National Mortgage Registry to further streamline mortgage processing.
According to the bank, the National Mortgage Registry (NMR) is designed as a centralized, digital database that will record all mortgage transactions in real-time, providing a single source of truth for stakeholders.
Osidi described NMR as a “digital game changer” and an innovative digital repository that will enable financial institutions, government agencies, and homebuyers to verify property titles, track mortgage status, and prevent fraudulent transactions with unprecedented ease.
The NMR’s primary goal is to streamline mortgage processing, reduce risks for lenders, and expand homeownership opportunities for Nigerians across all income levels. This is particularly significant for those in the informal sector, who have historically been excluded from formal mortgage financing due to a lack of verifiable income documentation.
According to him, NMR is not just a technological upgrade, but also a foundational tool for economic empowerment, pointing out that, by digitizing mortgage records, Nigeria is joining the ranks of advanced economies where digital registries have proven to be catalysts for housing market growth.
