Experts in the construction industry have stressed that it’s high time the Federal Mortgage Bank of Nigeria got a financial boost.
Toye Eniola, the Executive Secretary of the Association of Housing Corporations of Nigeria, shared in an interview with The PUNCH that given the current economic situation, beefing up FMBN’s funds was inevitable.
Eniola explained, “With the rising costs of building materials and construction, more money is needed in the system. Recapitalizing FMBN will help it provide more mortgages for affordable housing and enhance Nigeria’s mortgage market.”
He added, “FMBN offers loans at a low interest rate of six percent, which won’t change with recapitalization because it’s protected by law. However, boosting FMBN’s funds won’t automatically reduce interest rates across the entire mortgage market. Government policies and capital market forces influence lending rates.”
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Abdulfatai Garba, a realtor with eXp Realty LLC, also weighed in, suggesting that recapitalizing FMBN was crucial for achieving affordable housing in Nigeria.
Garba stated, “Since the current administration aims to provide affordable homes, it can reconsider and amend the law and policy to boost FMBN’s capital, making it a solvent institution to help the masses. While recapitalizing FMBN won’t ensure single-digit loans nationwide, it will encourage competition among lenders. Just look at what happened in the airline industry with Air Peace – competition can drive down prices and benefit consumers, who are ordinary Nigerians.”
In conclusion, the voices within Nigeria’s construction and real estate sectors emphasize the critical need for the Federal Mortgage Bank of Nigeria (FMBN) to receive a substantial financial injection. With construction costs soaring and the demand for affordable housing escalating, recapitalizing FMBN emerges as a pivotal step towards addressing these challenges.
Platforms like Krent are still committed to providing affordable housing options for buyers and renters, alike.Â
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