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FMBN targets $2.5bn diaspora money for housing sector

By on June 17, 2013

Federal Mortgage Bank of Nigeria (FMBN) is targeting an inflow of up to $2.5 billion diaspora money into the Nigerian housing sector, by introducing products that will encourage Nigerians living abroad own houses in the country. This is even as the federal government is targeting the development of 200,000 housing units in the next five years with the proposed Mortgage Refinance Company (MRC).

Managing Director, FMBN, Mr. Gimba Ya’u Kumo, disclosed this at the 4th Nigeria Development Finance Forum held recently in Washington DC.  He said in a statement, “The target of the inflow of diaspora money to Nigeria is about $10 billion.

If the housing sector takes about 25 per cent of that inflow, we are expecting that about $2.5 billion is coming to us in the form of inflow from Nigerians in  the diapora that would need houses and investments in the housing sector. That would translate to about N400 billion and with that we can fund mortgages and build about 30,000 housing units. That would be an opportunity for those who would want to have houses in Nigeria. This is within the envelope that we are allowed to operate which is N15 million or $90, 000.”

According to the statement, Ya’u Kumo further said the bank was working on modalities to launch a diaspora product to assist Nigerians living abroad who desire to own houses in the country adding that the move will also go a long way in reducing the nation’s housing deficit.

“We realised that about 17million Nigerians are living outside the country and most of them have plans to have houses and they have not been able to do so. We understand that over the years, people who have been remitting money for building or buying of a house have not been getting good results.

Stories have followed this money. What we are trying to do is that by the time we develop the Diaspora mortgage model, it will be a model whereby Nigerians living abroad who want to buy houses can resort to FMBN and at the end of the day if they do not take the mortgage, they can get refund of their money with interest,” he stated.

The FMBN boss said the bank chose the US as the focal point because 58 percent of the 17 million Nigerians all over the world are living in America. “We are going to do our case study here and in the UK. If it works well, we will try to replicate it in Asia and other parts of the world,” he added.

Meanwhile, the federal government is targeting the development of over 200,000 low-cost housing units within the next five years under a new mortgage finance scheme aimed at addressing the housing deficit challenge in the country.

Minister of Finance and Coordinator of the Economy, Dr. Ngozi Okonjo-Iweala, speaking in Abuja, last week, at the presentation of the mid-term report of the Jonathan administration, said government plans to achieve this with $300 million facility obtained from the World Bank at zero interest, with 40 years repayment period and ten years grace period.

According to the minister, government is concerned that it has become increasingly difficult for young Nigerians to own houses due to the high cost of mortgage financing, adding that the Federal Ministry of Housing has been directed to work with a mortgage finance institution to develop ways that would make it easier for Nigerians to get mortgages at affordable rates.

 

 

[Vanguard]