How FMBN Recovered N18.9bn Delinquent Loans in One Year
As Nigeria grapples with a significant housing deficit estimated in the millions, the role of the Federal Mortgage Bank of Nigeria has never been more crucial. Tasked with expanding access to affordable housing finance, the FMBN sits at the heart of the federal government’s efforts to provide shelter for the country’s low and middle-income earners. Steering this strategic institution at a critical juncture is its Managing Director and Chief Executive Officer, Shehu Osidi, who said he assumed leadership of the mortgage bank with a clear mandate to reposition it for efficiency, transparency, and greater national impact. In this interview with Emmanuel Addeh, he spoke on his efforts to refocus the bank, optimise its processes, and accelerate its several housing delivery programmes to Nigerians nationwide
Loan recovery is often seen as a big challenge in public financial institutions. What is the state of play at the FMBN?
At FMBN, we knew that to be truly sustainable and credible, we had to take recovery seriously and do it differently.
When we assumed office in early 2024, we found that a significant portion of our loan portfolio was non-performing, with billions of naira in delinquent or unpaid loans, some stretching back several years. These were funds that should have been recycled into new mortgages for other Nigerians.
Traditionally, many institutions would outsource loan recovery to third-party agents. But we took a different path. On June 3, 2024, we inaugurated seven zonal recovery task teams, composed entirely of FMBN staff.
These are people who understand the bank’s processes, know the history of the loans, and most importantly, have a stake in the success of the institution. Our belief was simple: no one is better positioned to recover the bank’s funds than those who helped build its systems.
We also embedded the teams within each geopolitical zone, making it easier to follow up directly with borrowers, engage state and local authorities, and build trust. These were not just desk-based operations. Our staff visited project sites, met with cooperative leaders, engaged developers, and held community town halls where necessary.
So, in 2024 alone, the recovery task teams successfully recovered N10.9 billion in bad loans. As of today, that figure has risen to N18.9 billion, and we expect it to climb even further. In addition, our regular recovery channels yielded another N3.1 billion last year.
What makes this even more remarkable is that we achieved this without the scandals, inefficiencies, or costs that often come with outsourcing. It showed that with the right leadership, clear targets, and strong accountability, public institutions can recover their own funds and do so effectively.
Moving forward, we’re institutionalising this strategy by creating permanent recovery units, linking loan officers’ performance to recovery rates, and enhancing our internal monitoring systems. So this is not a one-off campaign. It’s becoming a core part of our institutional culture.
A new board has just been inaugurated for the bank. How important is the board-management partnership in ensuring that FMBN delivers on its mandate?
The inauguration of the new board is a very significant milestone for the FMBN. In any organisation, especially a public financial institution like ours, the relationship between the board and management is critical to success. The board provides strategic oversight, policy direction, and governance accountability, while management handles the day-to-day operations and implementation.
We are fortunate to have a highly capable and diverse board under the chairmanship of Dr. Nasir Yusuf Gawuna, a seasoned public servant and statesman with decades of experience in governance and administration. Alongside him, we have accomplished professionals from banking, architecture, accounting, and the public service, each bringing fresh insight, experience, and balance to the bank’s strategic decision-making.
For us at management, this new board couldn’t have come at a better time. We’re in the middle of transformative reforms: Digitisation, product expansion, recovery optimisation, support for the Renewed Hope Housing Programme, and having an engaged and experienced board helps us stay aligned with national priorities, manage risks better, and scale our impact responsibly.
Already, we’ve seen their support in key areas: from fast-tracking product approvals like the Diaspora and Non-Interest Mortgage Loans, to reviewing our institutional performance and helping shape the roadmap for the next phase of growth. Their guidance will also be key as we work toward recapitalising the Bank and expanding our operational reach.
But beyond policy, what’s most important is the spirit of partnership. I have personally pledged to the board and Nigerians that management will operate with transparency, accountability, and full collaboration.
How would you assess the impact of the ‘Renewed Hope Housing Programme’ so far, and the role the FMBN is playing to support it?
Thank you. I believe it’s important to begin by commending President Bola Tinubu for making housing a central pillar of his Renewed Hope Agenda. In just two years, the administration has moved housing from the margins of public policy to the very heart of Nigeria’s inclusive development strategy. That shift is historic.
The Renewed Hope Housing Programme is not just about building houses, it is about stimulating economic activity, generating jobs, reducing poverty, and restoring dignity to the lives of ordinary Nigerians. And the results are already visible. We are seeing new housing developments rising nationwide and more importantly, renewed and increasing public trust in the government’s commitment to solving Nigeria’s housing challenge.
As the apex public mortgage institution in the country, FMBN has played and continues to play a vital role in translating this bold vision into practical outcomes. We are providing the critical financial support needed to kick-start and scale these housing projects. So far, we have committed over N100 billion in off-taker guarantees to unlock private sector investment in the construction of Renewed Hope Cities and Estates nationwide.
We are also directly funding in part landmark ministry-led housing developments such as the 3,112-unit Renewed Hope City in Karsana, Abuja, and the 1,500-unit Renewed Hope City in Ibeju-Lekki, Lagos, respectively.
So, to sum up, our role at FMBN is clear. We are a key financial engine of the programme. And under the leadership of the Honourable Minister of Housing and Urban Development, Ahmed Dangiwa, we are fully committed to supporting Mr. President’s vision to deliver affordable housing at scale.
By the way, what makes FMBN different from other banks or mortgage institutions in the country?
FMBN is a very unique institution. We are not a commercial bank. We are Nigeria’s foremost public sector housing finance institution, established specifically to provide affordable mortgage financing to low- and middle-income Nigerians, especially those who would otherwise be excluded from the formal mortgage market.
Our uniqueness starts with our mandate. Unlike private mortgage banks that operate primarily for profit, FMBN was set up to deliver social impact, to make homeownership possible for the average Nigerian. We do this through the National Housing Fund (NHF) Scheme, which we manage on behalf of the federal government.
Every worker in the formal sector contributes 2.5 per cent of their monthly income, and in return, they become eligible for a range of affordable housing loans at single-digit interest rates, with tenors of up to 30 years.
Another thing that sets us apart is affordability and accessibility. We offer mortgages at interest rates as low as 6 per cent and tenors of up to 30 years, which is significantly below what commercial banks provide at over 25 per cent and tenors of less than five years. And we require from zero to a 10 per cent equity contribution, which lowers the entry barrier for people trying to get on the housing ladder.
We also have a strong developmental approach. We don’t just finance individual borrowers, we work with cooperatives, developers, state governments, and labor unions to fund estate construction and provide bulk mortgage financing so that more Nigerians can benefit. And our products are designed to meet people where they are—whether they are civil servants, artisans, market women, or members of the diaspora.
In addition, our loans are non-recourse, meaning they’re secured solely by the property. If a borrower defaults, we do not go after their other assets. This de-risks the process for many low-income earners who are usually hesitant to engage with formal financial institutions.
You’ve worked closely with the Minister of Housing and Urban Development. How would you describe his leadership?
That’s an important question, and I must say it without hesitation: the minister has been an outstanding leader and a steady hand in Nigeria’s housing and urban development sector. His leadership has brought clarity, consistency, and renewed energy to the housing agenda.
One of the most impactful things he’s done is provide clear policy direction. He understands the housing system intimately, having served previously as Managing Director of FMBN, so he knows where the institutional gaps are, and how to fix them. That experience has made a big difference.
He’s also been incredibly supportive of our efforts at FMBN. He has backed key reforms that we’ve implemented over the past year, whether it’s in strengthening our loan recovery strategy, completing our long-overdue Core Banking Application, or expanding access to new market segments like the diaspora and the informal sector.
Most importantly, his insistence on affordability, transparency, and efficient service delivery has elevated our own internal performance. For example, his push for improved financial governance encouraged us to clear a four-year backlog of unaudited accounts in record time. That’s not something we did just to tick a box; it was inspired by a minister who believes public institutions must earn the trust of Nigerians.
His vision goes beyond housing delivery. He is deeply invested in land reforms, slum upgrading, building materials industrialisation, and housing finance innovation. These are the systems that sustain long-term housing development.
There are various ongoing projects in different parts of the country. How are they different from previous housing projects?
These projects represent a fundamental shift in how we approach housing development in Nigeria. In the past, many housing projects, especially government-led ones, suffered from poor planning, limited affordability, lack of infrastructure, or weak financing frameworks. What we’re doing under the Renewed Hope Cities and Estates model is completely different.
First, these projects are designed from the ground up to be fully integrated communities. We’re not just building houses, we’re delivering homes in livable, planned environments with essential infrastructure: roads, water, electricity, green spaces, and even provision for schools, clinics, and markets. That’s critical for dignity and sustainability.
Second, and very importantly, the financing model is more robust and inclusive. At FMBN, we’re providing off-taker guarantees and construction financing to developers, which de-risks the projects and ensures that delivery doesn’t stall halfway. We’ve already committed over N100 billion in guarantees, including N27 billion to support the Ibeju Lekki City, and N19.9 billion for the Karsana City in Abuja.
These are large-scale developments, 3,112 units in Karsana and 1,500 units in Lagos—and we’re working with the minister to replicate them in other parts of the country.
Third, the pricing structure is anchored on affordability. By leveraging our single-digit interest mortgage products, these Nigerians can now aspire to own decent homes with as little as 10 per cent equity contribution and up to 30 years to repay.
Fourth, the projects are part of a broader economic strategy. They create thousands of jobs in construction and allied sectors, stimulate local economies through supply chains, and support industrialisation. So when we talk about these Cities and Estates, we’re talking about a holistic national development strategy, not just bricks and mortar.
What is the update on the recent deployment of the bank’s much-talked-about core banking application?
Well, the deployment of the Core Banking Application is arguably one of the most significant institutional reforms we’ve undertaken at the FMBN in decades. For the first time, we are bringing our operations in line with global banking standards—real-time processing, full digitisation of records, and end-to-end automation of customer transactions.
Before now, the bank operated largely manually. Loan processing was paper-based, approvals took a long time, and contributors couldn’t easily access their records. This created bottlenecks, delays, and frustration for our customers. With this new platform, we’ve changed that narrative completely.
The Core Banking Application now allows our contributors to do what many Nigerians expect in today’s digital world: register for the National Housing Fund, check their monthly contributions, apply for loans, and track the status of their applications, all online. That kind of transparency builds trust and empowers Nigerians to take control of their housing journey.
For loan applicants and developers, the system is helping us process and disburse funds faster, with fewer errors, clearer audit trails, and stronger compliance. It also helps us manage risk more effectively, because we now have centralised data on all customer interactions, loan performance, and repayment trends.
I’m proud to say we officially went live in April 2025, and we are currently in the six-month maintenance and optimisation phase. By August, we expect to complete all onboarding, fine-tuning, and staff capacity building to fully unlock the benefits of this new system across our national branch network.
Ultimately, this is about making FMBN more responsive, more efficient, and more customer-centric. It’s about making it easier for the average Nigerian, whether a teacher, trader, or public servant, to access affordable housing finance without the stress of bureaucracy. That’s the kind of institution we’re building.
You must have experienced some key challenges in the process of deployment.
Absolutely. You’re right. Implementing a core banking platform, especially in a public institution with a legacy of manual operations like FMBN, is a massive undertaking. It’s not just about installing software; it’s a complete transformation of how the bank works from back-end operations to customer-facing services.
One of the first challenges we faced was data integrity. Many of our records were in physical form or on fragmented databases across branches. We had to go through the painstaking process of cleaning, standardising, and migrating millions of records into the new system to ensure accuracy and reliability. That took time and careful planning.
The second challenge was change management. This kind of shift naturally creates anxiety especially among staff who are used to manual systems. We had to invest in extensive staff training, orientation, and engagement to ensure that the people operating the system understood its value and felt confident using it.
Another hurdle was the complexity of integrating our existing services, National Housing Fund contributions, loan application tracking, mortgage disbursement, and customer support into a seamless platform. These are unique to FMBN, and not something off-the-shelf banking software is typically designed for. So, we worked closely with our implementation partners to customize the system for our needs.
Despite these challenges, we made steady progress. When we assumed office in early 2024, the project had already started but was lagging behind schedule. We immediately made it a priority, restructured the implementation plan, and put a dedicated task force in place to drive it to completion. That’s how we were able to go live in April 2025.
Today, we are in the six-month maintenance and stabilisation phase, which runs until the end of August 2025. This is a crucial period. We are monitoring system performance, fixing bugs, onboarding more users, and collecting feedback from our branches and customers to make continuous improvements.
The road has not been easy, but we’ve stayed the course because we believe that a modern mortgage bank must be digital at its core. The system is now in place, and we are determined to make sure it delivers the kind of transparency, speed, and service excellence that Nigerians deserve.
What specific products does FMBN offer to help Nigerians become homeowners, especially for low and middle-income earners and others?
That’s a great question because it goes to the heart of what we do at FMBN: designing and delivering affordable housing finance products that respond to the real needs of Nigerians across different income levels and work structures.
We recognise that Nigeria is a diverse country, and so we’ve built a range of products tailored to meet people where they are, whether they are formal sector employees, entrepreneurs, artisans, traders, or even Nigerians living abroad.
Our key products include: NHF Mortgage Loan, our flagship product. It enables contributors to the National Housing Fund Scheme to access up to N50 million to buy, build, or renovate a home at just 6 per cent interest per annum, the most affordable rate in the country, with up to 30 years to repay, depending on the age of the borrower. The equity contribution required is just 10–30 per cent, making it highly accessible.
There’s also Home Renovation Loan, which allows eligible NHF contributors to access up to N1 million to renovate or improve their existing homes. It’s simple, fast, and doesn’t require collateral beyond the borrower’s employment confirmation and NHF record.
Besides, the Rent-to-Own Scheme helps finance housing units that Nigerians can move into immediately and pay monthly rents that convert to ownership over time. It’s perfect for people who can’t make an upfront equity contribution or who want a more flexible path to homeownership.
The Construction Loan and Cooperative Housing Development Loan are targeted at developers, cooperatives, and community groups who want to build in bulk for their members. We provide funding for estate construction under clear affordability guidelines so that end-users can eventually take over with FMBN mortgages.
There’s also the Non-Interest Ethical Mortgage Products, Diaspora NHF Mortgage Loan, which is coming soon. What ties all these products together is a shared focus on affordability, inclusiveness, and flexibility. We want every Nigerian, whether you’re a civil servant in Nasarawa, a trader in Aba, a nurse in Kaduna, or a software developer in Canada, to have a path to homeownership in Nigeria through FMBN.
How does the rental assistance product work?
Oh, it’s is a direct response to one of the most pressing realities many Nigerians face today, which is the high cost and upfront burden of annual rent payments, especially in urban areas. We understand that while homeownership is the ultimate goal, millions of Nigerians are still renters, and the struggle to pay one or two years’ rent upfront is a serious challenge that affects household stability and financial security.
What makes the rental assistance product unique is that it is not tied to FMBN-funded homes. It is designed specifically to support Nigerians who rent privately-held residential properties, those already built and available in the market. So, whether it’s a young worker renting a one-bedroom apartment in Lagos or a teacher renting a two-bedroom flat in Jos, this product is meant to ease that pressure.
In this case, FMBN provides a soft loan to eligible NHF contributors, up to a specified amount to enable them to pay their annual rent upfront. The loan is then repaid monthly over the year at a low, single-digit interest rate. It’s a win-win. The landlord gets their rent, and the tenant avoids the financial shock of a large, one-off payment. Importantly, this makes renting more predictable, manageable, and less stressful.
This product will be transformational, especially for low- and middle-income earners who may not yet be ready to buy a home but still deserve a dignified and stable place to live. It helps them avoid falling into debt, borrowing from loan sharks, or defaulting on rent—issues that often lead to displacement and hardship.
We learnt that loan approvals rose from N39.7 billion in 2023 to N71.5 billion in 2024. How did you achieve this?
Thank you. This is one of the achievements we are most proud of, and it reflects a deliberate shift in how we do business at FMBN. Moving from N39.7 billion in loan approvals in 2023 to N71.5 billion in 2024, almost a 100 per cent increase. It didn’t happen by chance.
It was the result of the speed of work of the Minister of Housing and Urban Development. It was also a result of our focused institutional reforms, better coordination with key stakeholders, and most importantly, a commitment to expand access to affordable housing finance for Nigerians in every corner of the country.
The first enabler was process efficiency. We reviewed and simplified our internal procedures, cut down bureaucracy, and digitised significant parts of the loan approval workflow. This allowed us to reduce bottlenecks and fast-track approvals without compromising on due diligence.
Secondly, we strengthened our collaboration with state governments, developers, cooperative societies, and labour unions. Many of our approvals in 2024 were linked to well-structured projects, Renewed Hope Cities, public-private housing initiatives, and cooperative-driven schemes. These bulk arrangements allowed us to process and disburse funds at scale, reaching more people in less time.
Thirdly, the deployment of our Core Banking Application also played a role. Though it went live in April 2025, preparatory work in 2024 enabled us to better track, analyse, and manage loan data, making decision-making more agile and evidence-based.
But beyond the numbers, the most important impact is that tens of thousands of Nigerians now have access to real, life-changing housing finance. This surge in approvals also has a multiplier effect on the economy.
Every new loan we approve supports construction jobs, supplies for local building material markets, land development, and SME activity across the housing value chain. On average, each housing unit financed creates about 25 jobs, from artisans and bricklayers to electricians and transporters. So when we approve N71.5 billion worth of housing loans, we’re also creating thousands of jobs and stimulating economic growth.
What should Nigerians expect from FMBN over the next two years?
Over the next two years, Nigerians can expect to see a more responsive, innovative, and impactful Federal Mortgage Bank of Nigeria. We are building on the momentum of the past year to deepen reforms, scale delivery, and bring our services closer to the people, especially those who need them the most.
Our vision is simple but bold. That is, to make affordable homeownership a reality for as many Nigerians as possible, regardless of income level or location. And we’re doing this through a combination of product innovation, technology-driven service delivery, and strategic partnerships.
First, we’re expanding our product base. By the end of this year, we plan to formally roll out the Diaspora NHF Mortgage Loan, in collaboration with NIDCOM and the Central Bank of Nigeria (CBN).
This will provide an avenue for hardworking Nigerians abroad to invest in real estate back home through a trusted, transparent platform. We’re also rolling out the Non-Interest Ethical Mortgage Products, a long-awaited solution for millions of Nigerians who prefer faith-compliant financial options.
Second, we’re targeting underserved groups. We’re finalising new housing finance products tailored to informal sector workers, artisans, traders, market women, who historically lack access to mortgage finance. We believe that homeownership should not be a privilege of the formal sector alone. Everyone deserves a chance to own a decent home.
Third, we will fully operationalise our Core Banking Application. By August 2025, all of our branches nationwide will be using the system end-to-end. This means faster loan processing, real-time updates, digital tracking of contributions and applications, and ultimately, a better customer experience.
We are also working on institutional strengthening, clearing legacy issues, improving internal governance, enhancing staff capacity, and investing in a new generation of FMBN professionals who can deliver results with integrity and innovation.
So, Nigerians should expect a more visible, accessible, and impact-driven FMBN, one that delivers not just numbers on paper, but tangible improvements in people’s lives.
