Opportunities and challenges for FMBN’s new leadership

President Bola Tinubu’s recent restructuring of the Federal Mortgage Bank of Nigeria (FMBN) leadership has instilled renewed hope for the organisation tasked with making affordable housing a reality for Nigerians. The new team, led by seasoned banker Mr. Shehu Usman Osidi, shoulders an ambitious agenda to address long-standing issues and unlock the bank’s full potential.

At the heart of this agenda lies ensuring housing accessibility for the average Nigerian. The staggering 28 million-unit housing deficit is primarily driven by affordability constraints. The new leadership must prioritise exploring innovative financing models, such as rent-to-own schemes and extended mortgage terms, to bridge the gap between income and property prices.

Furthermore, streamlining the mortgage application process and ensuring efficient loan disbursement are essential. Bureaucratic hurdles and complexities have discouraged potential borrowers. The FMBN needs to leverage technology and partnerships to create a seamless experience, attracting more Nigerians to formal mortgage options. Financial inclusion efforts must also be prioritized, catering to low-income earners and informal sector workers often excluded from traditional mortgage systems.

The new FMBN leadership can unlock significant potential by collaborating with private developers and investors. The bank can act as a facilitator, de-risking investments and creating attractive incentives for private participation. This collaborative approach can inject much-needed capital and expertise to boost housing construction.

A significant portion of the FMBN’s loan portfolio is classified as non-performing. Tackling this issue requires a multi-pronged approach, including effective debt recovery strategies, improved loan administration, and stricter credit risk assessment. Dr. Muhammed Sani Abdu, the new Executive Director of Loans and Mortgage Services, is well-positioned to address this challenge with his experience. Reducing non-performing loans will free up capital for new lending and ensure the bank’s financial sustainability.

Internal reforms are crucial to improving the FMBN’s overall effectiveness. Implementing robust governance structures, strengthening risk management practices, and fostering a culture of transparency and accountability are essential steps. By optimizing internal processes, the bank can allocate resources more efficiently and minimize operational costs.

While challenges remain, the new FMBN leadership holds the key to reshaping the organisation and empowering Nigerians to achieve their dream of homeownership. Time will tell if the FMBN can rise to the occasion and deliver on its ambitious goals. However, with a clear vision, focused action, and effective collaboration, the path towards a future where affordable housing is a reality for all Nigerians is within reach.

Mukhtar Jarmajo,

Lobito Crescent,

Wuse 2, Abuja.