FMBN: Building Business-driven Culture


John M. Agbokpile

Competent and visionary leaders are critical to a nation’s quest to build efficient institutions that help governments deliver important national services in an impactful, sustainable and proactive fashion. This is, more so, in a country such as Nigeria, where successive decades of inconsistent policies, slow social and economic progress and unsteady politics have left massive deficits in many critical aspects of the economy. Noteworthy is the housing sector. Population growth, especially in cities, has outpaced capacities of both government and private sector initiatives set up to ensure access to decent, quality and affordable homes.

The reality of perennial stagnation that further accentuates the problem – as the ever-increasing multi-million figure housing deficit demonstrates – explains why the recent series of bold initiatives and measures being taken by the current management of the Federal Mortgage Bank of Nigeria (FMBN), are significant. The expertise, professionalism and initiatives demonstrated by the FMBN Board under the chairmanship of Dr. Adewale A. Adeoye OON and Arc. Ahmed Musa Dangiwa-led management team of the 63-year old government-owned mortgage institution for promoting access to affordable homes for Nigerian workers, give hope of a permanent shift in the unimpressive narrative of the country’s foremost mortgage institution.

From being an institution that was marked by inefficiency owing to excessive government and political interference, lack of impact and encumbered by bureaucracy, noticeable signs of clear thinking, a willingness to embrace global best practices, a commitment to creating wider impact by placing high premium on concrete plans, timelines, performance and results. This is timely, necessary and commendable.

Leveraging Private Sector Expertise
Noteworthy is FMBN’s increasing association with reputable private sector firms with track record for helping institutions build efficiencies and deliver stronger results – locally and globally. The latest example is the bank’s recent announcement that it has engaged the services of the KPMG Advisory Services as part of its ongoing efforts to reform the country’s foremost mortgage institution and strengthen its capacity to deliver on its mandate as a business-driven affordable social housing provider.

Under the terms of the Strategic Advisory Engagement, KPMG will work closely with FMBN to develop a 5-year Strategic Action Plan for the bank. This will include diagnosis of the current macro-environment, review of FMBN business operating models, market and industry positioning and a visionary road map for the institution’s future. Key focus areas for the strategic engagement include business expansion, process optimization and market penetration.

FMBN’s engagement of KPMG Advisory Services, a reputable and leading management consulting and business improvement firm with a good track record of delivering organizational growth, is significant on many counts. First, the incorporation of private sector expertise in the design of a 5-year action plan will impose clarity to FMBN operations and offer a clear, measurable and timed strategy on how to grow the organisation. The second is a clearer path to improved turnaround time for the processing of FMBN housing services. KPMG’s expert edge in the review and design of smart business processes will lead to a streamlining of tedious manual businesses, cut time wastages, integrate actions of disparate but relevant process stakeholders. The implementation of improved processes will over time help FMBN deliver faster and better services.

Culture of Corporate Governance
The engagement of KPMG and the 5-Year Strategic Plan that they will deliver will help to consolidate ongoing reform efforts at the bank. A good example is the bold institutional measures to strengthen the system of rules, practices and processes that guide the conduct of FMBN operations as a necessary measure to win back the confidence of local and international investors as well as critical stakeholders in the industry. Some of these include the adoption of a robust Risk Management Framework and Cost Containment. The hallmarks of the corporate governance culture include ensuring accountability, fairness, transparency and corporate culture, which are necessary to maintain the integrity of the bank.

Strong Performance Despite Challenges

Besides the institutional reform efforts, FMBN has in recent time shown commendable private sector capacity for making the most of its current financial status. Despite several challenges ranging from undercapitalization – less than N5bn paid up capital – to lack of appropriate legal frameworks to enforce compliance to contribution guidelines by financial institutions to the National Housing Fund Scheme (NHF), the bank has built and maintained a trajectory of strong performance.

A recent 4-year performance report by the Group Head, Corporate Communications, Mrs. Zubaida Umar revealed impressive trends and figures. Across all corporate performance indicators including loan disbursements, delivery of housing stock, funds mobilization, mobilization of new contributors to the NHF Scheme, available loan products, refund of NHF contributions, the Bank surpassed previous records of achievements. This includes disbursing a total sum of N147.3 billion for affordable housing finance through the National Housing Fund (NHF) Scheme. This comprises Estate Development Loans totalling N66.3 billion for the construction of 1,726 housing units; NHF Mortgage Loans totalling N36.6 billion granted to 5,030 beneficiaries; Home Renovation Loans totalling N22.7 billion granted to 27,618 beneficiaries; and Ministerial Pilot Housing Scheme loans totalling N21.7 billion for the construction of 1,619 housing units.

Curiously, the total loan disbursement of N147 billion between 2015 – 2019 represents over 70% of total loan portfolio of N210.6 billion advanced by the Bank since commencement of the NHF Scheme 24 years ago. This translates to an annual average of N36.75 billion (or more than 600 per cent increase) during the Buhari years compared to an annual average of just N6 billion in previous years!

In a radical departure from the perennial problem of delayed refund of NHF contributions to retirees, in the last four years FMBN recorded over N23 billion as pay-out of NHF contributions to 181,436 qualified contributors. This accounts for 70 per cent of the cases of the cumulative of 257,396 refund applications successfully processed and 82 per cent of the cumulative sum of N28 billion refunded since the NHF Scheme was established.

Additionally, the FMBN reduced the equity requirement for NHF contributors wishing to access NHF mortgage loans. With effect from 2018, Mortgage loans of N5 million and under attract zero (0%) equity contribution, a downward review from the 10 per cent previously required as loan down payment; and Mortgage loans of over N5 million to the maximum amount of N15 million now attract a flat equity contribution rate of 10 per cent, down from the 20 per cent and 30 per cent previously mandatory to access the loan facility.

The drastic downward review of equity requirement for accessing the NHF mortgage loan has made it more accessible and affordable to Nigerian workers within the low- and medium-income brackets. The implication now is that workers who contribute to the National Housing Fund (NHF) consistently and are up-to-date are eligible for up to a N5 million loan without having to put down a single kobo as equity while those seeking for loans above N5 million to N15 million will only put down 10 per cent as equity.

Equally noteworthy is FMBN’s introduction of the ‘Rent-to-Own’ Homeownership Scheme. The scheme offers an easy and convenient payment arrangement towards homeownership for Nigerian workers. It makes it possible for a Nigerian worker to instantly move into an FMBN-owned housing property as a tenant and conveniently pay towards ownership of the property in monthly or annual instalments over as long as 30 years at an interest rate of just nine per cent!
According to Dangiwa, “The rent-to-own housing product is designed to make sure that any worker who collects a salary should be able to live in his own home and pay conveniently over periods as long as 30-years! This is a massive relief especially given how little workers earn.”

Another notable stride of the FMBN is the launch, last year, of FMBN Digital Platforms. The Digital Platforms have ushered in a new era of transparency and accountability in the operations of the National Housing Fund (NHF) by empowering contributors with real-time access to information on their NHF accounts. Key components of the FMBN Digital Platform Solutions Suite of services include the *219# USSD Short Code service via GSM mobile networks; NHF Mobile Apps available on android & iOS platforms; online Self-Service Kiosk via the Bank’s web portal ( and SMS and email notification services to NHF customers.

The platforms enable contributors to receive instant notifications, check records of NHF contributions on the go, update NHF personal records, check NHF balance of contributions, register and retrieve NHF numbers, request for statements of account, calculate home affordability and mortgage payments, and obtain latest NHF-related information from the FMBN Bulletin Board online service.

The greater transparency, clearer disclosure and convenient access to records of contributions from the comfort of homes and offices or while on the go via personal computers or mobile phones has boosted confidence in the NHF Scheme. As affirmed by the Managing Director, Arc. Dangiwa, “On resumption of office, we audited the system and discovered that most employers under-remit deductions, remittance schedules of deductions are not provided, contribution records are not updated or maintained in passbooks and most contributors do not know the status of their contributions. Having critically evaluated the issues, we decided to automate the process to give contributors unfettered access to information pertaining to their contributions and the policies associated with the Scheme for greater efficiency, transparency, accountability and service delivery.”

The FMBN has also moved to strengthen stakeholder participation and confidence in the operations of the National Housing Fund (NHF). The bank in conjunction with the Nigeria Labour Congress (NLC), Trade Union Congress (TUC) and the Nigeria Employers’ Consultative Association (NECA) last year launched the National Affordable Housing Delivery Programme for Nigerian Workers. The Housing Programme aims at a structured and sustainable approach to affordable housing delivery for Nigerian workers nationwide. About 2,800 housing units are to be delivered in fourteen (14) sites across the six geopolitical zones of the country in addition to Lagos and Abuja, in batches of a minimum of 200 units per zone. House types include finished semi-detached bungalows as well as 1-, 2- and 3-bedrooms in blocks of flats.

Overall, the new direction of positive change at the FMBN inspires hope for expansion of access to affordable housing for a greater number of Nigerians. To sustain the tempo of reform, government and stakeholders should rally round the current management and provide needed support in its plans to recapitalize the bank and review the NHF and FMBN Act, both critical to taking the bank to the Next Level, in line with the plans of the Buhari administration for housing development.

Agbokpile is a public policy analyst based in Abuja