PenCom Announces 34 Mortgage Banks for RSA Mortgage Financing

Ebere Nwoji

No less than 34 mortgage banks have been approved by the Central Bank of Nigeria (CBN) to work with the National Pension Commission (PenCom) and Pension Fund Operators in providing mortgage financing to Contributors into the Contributory Pension Scheme (CPS).

PenCom disclosed this at a media retreat organised by the Pension Operators Association (PenOp) for pension journalists in Lagos.

PenCom said it would through collaboration with the approved mortgage institutions fully implement acquisition of residential mortgages by Retirement Savings Account (RSA) holders using their RSA balance.

The commission which in September this year released guidelines on using RSA balance of CPS contributors for home mortgage financing said 18 out of the banks were   from Lagos, eight from Abuja and eight from other states.

Head of Investment Department, PenCom, Ibrahim Kangiwa, said this during a seminar organised by Pension fund operators for pension reporters in Lagos.

Meanwhile, PenCom and Pension Operators Association of Nigeria have highlighted the requirements for the Retirement Savings Account holders to access their equity contributions for the acquisition of residential mortgage.

Presenting the theme paper, Kangiwa, said for contributors under the Contributory Pension Scheme (CPS) to be eligible to use their RSA balance for acquisition of residential mortgages, they must have contributed for five years (60 months) cumulative of employer and employee’s mandatory contributions.

He said the same thing was applicable to the contributors under the Micro Pension Plan (MPP), adding that married couples, who individually met the eligibility criteria, were also eligible.

On authorised limit for equity contribution that qualifies a contributor, Kangiwa put the maximum allowed at 25 per cent of the RSA balance, noting that “where 25 per cent of RSA balance is more than equity contribution, the RSA holder can only access the amount equivalent to equity contribution required.

He said Where 25 per cent was not sufficient for equity contribution, RSA holder may utilise Voluntary Contribution (VC) in line with the Voluntary Contribution guidelines.

“Where 25 per cent is not sufficient for equity contribution, Micro Pension (MP) contributor may utilise contingency portion in line with MP guidelines.

“Where 25 per cent is insufficient as equity contribution, RSA holder shall deposit the difference with the mortgage lender,” Kangiwa explained.

Also speaking, Head Surveillance Department of PenCom, Dr Ehimeme Ohioma,  said  there was no doubt that the mortgage financing incentive would act as catalyst to grow number of contributors into the CPS scheme.

He said Nigerian workers and contributors into the CPS scheme needed the mortgage financing through pension savings given the fact that Nigeria has the lowest percentage of home ownership when compared with other countries in the world even in Africa. 

He said this explained why the commission this time determined to implement the residential mortgage financing for the contributors to ensure that RSA holders have houses of their own.

 Chief Executive officer of PenOp, Mr Oguche Agudah, said approval of the guidelines for mortgage financing using RSA savings was the best thing that could happen to RSA holders in Nigeria, considering the acute shortage in home ownership in Nigeria.