Assessing FMBN’s New Leadership, One Year After

It’s been one year since the Federal Mortgage Bank of Nigeria (FMBN) welcomed a new leadership, headed by Shehu Osidi, marking a positive and significant shift in the organisation’s trajectory. As the bank navigates the complexities of Nigeria’s housing finance landscape, Emmanuel Addeh tracks its progress in the last one year.

When Shehu Osidi took the helm of the FMBN as Managing Director and Chief Executive in February, 2024, he was aware that he stepped into a role critical to tackling Nigeria’s persistent housing challenges.

Appointed by President Bola Tinubu at the time, Osidi arrived with extensive experience in banking and mortgage finance, tasked with leading an institution that had long been central to the nation’s housing ambitions, but faced mounting pressures to deliver.

A year after, even the incurable pessimist will admit that the first 365 days have unfolded as a period of critical shifts, where reforms have taken shape, financial strategies have evolved, and efforts to expand access to homeownership have gained traction.

Without doubt, the bank has focused on delivering key housing projects, improving access to mortgage financing, expanding the National Housing Fund (NHF) scheme and driving digital transformation to enhance service delivery. The bank appears to have refocused, reinventing the way things are done, whether internally or in its interactions with its various stakeholders.

Raising the Bottom Line

The overarching objective of the FMBN is the provision of Mortgage loans to Nigerians to buy or build houses. Over the past year, the bank seems to have lived up to this expectation. Within the period, the bank recorded an operational surplus of N11.58 billion based on the Management Accounts for 2024. It is the first such experience since FMBN came into existence over 30 years ago.

Although this figure is expected to come down significantly when impairment is applied, the bank has set out to tackle all aspects of its operations that lead to high impairments, especially  the high non-performing loans inherited by the current management, and pursuing with great efforts the recapitalisation of the bank.

With a grossly inadequate capital of N2.5 billion, which has hindered the capacity of the bank to perform optimally, one of the plans is to have this capital raised to N500 billion in the nearest future.

“In order to enhance service delivery and mortgage accessibility, the current executive management has focused on improving operational efficiency and this has resulted in significant improvements in our performance parameters.

“Under the National Housing Fund (NHF) operations, our collections grew by N3 billion in 2024 resulting in a total collection of N103 billion, compared to the N100 billion the bank recorded in 2023. This increase in NHF contributions demonstrates renewed trust and participation in the NHF scheme by Nigerian workers,” Osidi said, recently in an event to mark his one year in office.

New Products

In recent times, FMBN has introduced a number of products, including: the Diaspora Mortgage Loan, Rent Assistance Loan and the Non-Interest Loan.

The Diaspora Mortgage Loan, which is a strategic collaborative initiative between FMBN and the Nigerians in Diaspora Commission (NiDCOM),  is expected to open up opportunities for Nigerians living abroad to invest in real estate back home in Nigeria.

“There are ongoing engagements between the Bank, NiDCOM and the Central Bank of Nigeria (CBN) aimed at ensuring seamless transaction processes. International Money Transfer Operators (IMTOs) are also being engaged to facilitate smooth transactions, with plans for a full rollout of the product expected in Q1 2025.

“The NHF Diaspora Mortgage Loan Scheme is expected to further expand the scope of mortgage accessibility, driving down the housing deficit facing the country,” the FMBN stated.

Others include: The Rent Assistance Loan, a micro-housing loan product designed to alleviate the financial burden of rental payments for eligible Nigerians, which is set for launch as well as the Non-Interest Loan, designed for Nigerians who are averse to interest payment, particularly Nigerians of low and middle-income status.

Improving Turnaround Time

Over the years, the bank says it has struggled to catch up with the huge housing demand in the country, with many applicants waiting for several months before their mortgages are disbursed.

However, FMBN has prioritised efficiency and customer satisfaction in the last one year, leading to significant improvements in service delivery. One of the most notable achievements has been the reduction in turnaround time for loan approvals and disbursements.

“Previously, beneficiaries often faced delays of several months, but the bank has streamlined its processes, cutting the processing time to an average of 30 days, as long as the applicant has properly submitted all required documents and the board has met within the period to initiate approvals.

“An important driver of this improvement has been the digitisation of processes, a key component of the seven-point agenda of the bank’s current executive management. The deployment of digital platforms like the Core Banking Application has significantly reduced bureaucratic bottlenecks.

“Loan applications are now processed online, ensuring faster and more transparent service delivery. This shift to digital platforms has also enhanced the bank’s ability to monitor and evaluate its operations, leading to better decision-making and resource allocation,” the FMBN stated in note.

Another one is mystery shopping, a tool to improve customer service delivery and enhance customer experience and satisfaction, which has brought about more effective and efficient responsiveness to inquiries and complaints.

Strategic Handshakes

In the last 12 months, strategic partnerships have been forged with key stakeholders in the housing and financial sectors. From state governments, labour unions, and stakeholders in the real estate, to players in the housing finance and mortgage sectors, as well as international housing finance institutions.

While looking to expand its network and leverage multilateral resources for greater impact, there has also been a focus on attracting Direct Foreign Investments (DFIs) into the Nigerian mortgage market.

In this regard, the bank disclosed that it is collaborating with Shelter Afrique Development Bank for the development of affordable housing to target student populations across the nation.

“The bank is further exploring partnership opportunities with the International Union of Housing Finance, Association of African Development Finance Institutions, African Alliance for Youth Empowerment and a host of other like-minded organisations.

“FMBN’s engagement with international development agencies and financial institutions is aimed at exploring innovative financing models for affordable housing. These collaborations are opening up new avenues for funding and technical support, enabling the Bank to expand its operations and deliver on its mandate more effectively,” THISDAY was told.

With the recent return of Kano to the fold, a total of 35 states are now on board the NHF scheme, which has ensured wider access to mortgage financing for Nigerian workers, addressing the housing deficit in various regions and ensuring that more Nigerians benefit from the NHF scheme.

It is also enhancing partnerships with private developers, especially through the Real Estate Developers Association of Nigeria (REDAN), to deliver affordable housing projects across the country.

“These partnerships have resulted in many ongoing and completed projects in the past year, providing shelter for thousands of families. By working closely with developers, FMBN has been able to ensure that these projects are completed within stipulated timelines and budgets, while maintaining high standards of quality,” it added.

 6,853 Projects, 106 Locations

Over the past year, the bank has financed the construction up to completion level of over 1,044 housing units across the country, with a total of 6,853 ongoing projects in 106 locations in both urban and rural areas, ensuring that Nigerians of low and middle-income status have access to decent housing.

FMBN has provided N100 billion as off-taker guarantee for the Renewed Hope Cities and Estates Programmes, starting with the 3,112 housing units in Karsana, FCT and championed by the Minister, Federal Ministry of Housing and Urban Development, Ahmed Dangiwa.

In addition, the bank provides loans through its various loan windows to contributors to the NHF scheme nationwide, to off-take houses provided through the programme or to members of beneficiary Co-operative Societies.

Through its various projects, the bank has been contributing to national productivity and economic growth, with the provision of about 171,325 jobs across Nigeria, through its efforts at affordable housing delivery.

Engineers, architects, surveyors, and even artisans across the value chain in the housing and real estate sector are able to access gainful employment which in turn has a ripple effect on the standard of living and economic growth.

Ambitious Targets in 2025

Building on the progress made in the past year, FMBN has set ambitious goals for 2025. NHF collections are targeted to increase to N211.33 billion, leveraging contributions from the informal sector and the diaspora community.

Mortgage loan offerings will expand, with new products targeting a total of 4,200 homeownership loans, with 2,500 dedicated to non-interest Rent-to-Own facilities, 1,100 for Mortgage Loan Origination, 400 as Rent-to-Own Facilities and 200 Diaspora Mortgage Loans.

The Bank also targets a total of 15,122 home construction loans, focusing on mega and mini city projects, as well as provision of 43,000 housing micro-soft loans in Home Renovation, Rent Assistance and Micro Home Improvement Loan.

In 2025, the Bank also aims for an aggressive loan recovery drive, targeting N93.7 billion in recoveries, and will finalise the National Mortgage Registry establishment to improve mortgage processing efficiency.

Looking Ahead

As the FMBN moves forward under the leadership of Osidi, the future appears to hold immense promise for transforming Nigeria’s housing landscape. Osidi’s strategic vision, anchored on recapitalisation, digital transformation, and expanded mortgage accessibility, positions the bank to address  long-standing challenges which have beset it for years.

By fostering stronger stakeholder collaboration and pushing for legislative reforms, the new leadership of the mortgage bank is laying a robust foundation for a financially sustainable institution capable of meeting the nation’s housing demands.

Looking ahead, the success of FMBN will hinge on its ability to execute the bold initiatives set out by the new leadership, while navigating economic and regulatory hurdles. If, as they say, the morning tells the day, then there is no doubt that looking at Osidi’s first year at the headship of the bank,  a turning point may have finally come for the FMBN.