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NDIC plans bailout for micro finance, mortgage banks

By on April 4, 2013

The Nigeria Deposit Insurance Corporation, NDIC, has said it would grant assistance to deserving Primary Mortgage Banks, PMBs) and microfinance banks (MFBs, as part of its efforts to reposition the sub-sector for greater performance of the financial services system.

The NDIC Managing Director, Alhaji Umaru Ibrahim made this remark in Abuja when the Board of Directors and management of the Federal Mortgage Bank of Nigeria, FMBN, paid him a visit.

Alhaji Umaru disclosed that the corporation was already developing framework for granting the financial assistance but stressed that stringent conditions would be put in place for deserving MFBs and PMBs to comply with.

He reiterated in his warning that MFBs and PMBs that were deliberately mismanaged by their owners would not be eligible for such accommodation bill, adding that details of the novel framework would soon be made known to stakeholders once it is approved by the Board of the Corporation.

While emphasizing the strategic role of mortgage financing in the development of the financial services sector, the MD/CE stated that the Federal Ministry of Finance, Central Bank of Nigeria, CBN, and the Corporation were working on possible measures aimed at reviving the sub-sector towards achieving the transformation agenda of the Federal Government in the area of affordable housing for all taking cognisance of the huge deficit existing in the industry.

He pointed out that some of the measures include amongst others, the CBN’s revised supervisory guidelines for primary mortgage banks, refinancing scheme in the mortgage sector and the proposed review of the land use act.

Alhaji Umaru disclosed that the commencement of liquidation of seven out of the 25 PMBs recently closed by the CBN with payment of compensation to their depositors. He lamented the difficulties being encountered by the Corporation in the liquidation process as many of them merely existed as paper institutions.

He said the seven were those the Corporation could identify after frantic search at the Corporate Affairs Commission, CAC, to determine the management, board, shareholders and other details of the closed PMBs.