Banks, insurance companies not complying with NHF Acts, FMBN laments

Yemi Adedeji, Abuja

The Federal Mortgage Bank of Nigeria (FMBN) says that banks and insurance companies have refused to comply with the National Housing Fund (NHF) Act 1992.

‎The situation it said has left the Bank grossly undercapitalised and in a disadvantaged position to carry out its primary function of financing housing delivery to the masses.

Ahmed Dangiwa, Managing Director FMBN, disclosed this at the national advocacy forum held at the Royal Institute for Training and Human Capital Development, Suleja, Niger state.

He noted that some government agencies which were supposed to provide capital for the Bank as its shareholders have not done so since inception, hence the inability of the bank to deliver on its mandate.

Dangiwa explained that the NHF Act compels all commercial and merchant banks to invest in the NHF, 10 per cent of their loans and advances at 1 per cent interest rate above the interest payable on current account by banks.

He said the Act also requires insurance companies to invest a minimum of 20 per cent of their non-life funds and 40 per cent of their life funds in real property development of which not less than 50 per cent shall be paid into the NHF through the FMBN at an interest rate not exceeding 4 per cent.

Dangiwa stressed that Section 11 of the NHF Act stipulates that “the Central Bank of Nigeria (CBN) shall collect from commercial and merchant banks at the end of every year and not later than one month thereafter, the percentage of their contribution to the fund.

” The CBN shall within two months of making collection from the banks pay the money to the bank (FMBN) for investment in the fund”.

“Unfortunately, none of these provisions of the law has been implemented till date, thereby inhibiting the Bank’s capacity to provide affordable homeownership for Nigerians,” he lamented.

He urged the non-governmental organisations to support the FMBN in surmounting these challenges by being advocates and champions of the FMBN cause through working together to ensure that the National Assembly amends the relevant sections of the NHF Act and the FMBN Act 1993 to enable the Bank function better.

The FMBN boss assured that a well recapitalised and supported FMBN would empower Nigerians to become home owners, noting that the Bank offers housing loans at 6 per cent interest rate, a rate which no other bank can offer in Nigeria.