One year after a leadership overhaul, the Federal Mortgage Bank of Nigeria (FMBN) has started to show tangible signs of recovery, with reforms aimed at deepening mortgage access and restoring public trust in the institution.
President Bola Tinubu had appointed Shehu Usman Osidi as Managing Director of FMBN in February 2024.
The new management took off with series of policy and operational reforms aimed at repositioning the bank as a more responsive player in Nigeria’s housing finance sector.
In a performance report recently submitted to the Federal Ministry of Housing and Urban Development, the bank announced a N11.58 billion operating surplus for the 2024 financial year—its first in over three decades. Though the final figure is expected to be adjusted to account for historical loan impairments, the development marks a symbolic shift for a bank that has faced years of operational and credibility challenges.
The surplus is attributed to improvements in loan recovery, enhanced internal controls, and increased public engagement with the National Housing Fund (NHF) scheme.
Though the final surplus will be adjusted to account for impairments and non-performing loans inherited from previous management, the announcement of the surplus signals a strong recovery trajectory. “We’re on track to continue the recovery path,” Osidi said during a recent briefing, adding that the next phase would focus on tackling non-performing loans and ensuring greater operational sustainability.
The bank’s focus has been on improving loan recoveries and increasing the efficiency of its internal processes.
Significant progress has been made in addressing the high levels of impairment that have historically eroded the bank’s profitability. In particular, the management has taken steps to curb defaults in the bank’s mortgage lending programs, which are often hindered by delayed repayments and poor credit risk management.
However, challenges remain, particularly the bank’s capital base, which stands at a modest N2.5 billion—far below the required threshold for an institution tasked with addressing Nigeria’s housing deficit. Discussions on recapitalization are ongoing, and stakeholders are hopeful that with further investment, FMBN can expand its lending capacity and continue the trajectory of growth seen in 2024.
The National Housing Fund (NHF), one of the primary vehicles for promoting affordable housing in Nigeria, has seen significant improvement under Osidi’s leadership. In 2024, the NHF collections grew by N3 billion, reaching a total of N103 billion compared to N100 billion in 2023. This increase represents a renewed trust and participation in the scheme by Nigerian workers, who contribute monthly to the fund with the aim of accessing mortgage loans for home purchase.
One of the critical indicators of FMBN’s progress is the expanded participation in the NHF scheme. By the end of 2024, 658 employer organizations and 178,619 employees had been registered, compared to 556 employers and 113,577 employees in 2023. This expansion of the NHF scheme is crucial as it widens the pool of contributors, making more workers eligible for home loans and increasing the funding available for housing development.
Improving access to mortgage financing has been at the heart of the bank’s agenda under Osidi. The introduction of digital platforms for loan applications and the reduction of processing times for NHF loan disbursements from months to an average of 30 days has been one of the most notable achievements. These digital innovations have not only made the application process more efficient but also enhanced transparency and accountability within the institution.
In a bid to diversify housing finance options and extend coverage to underserved segments of the population, FMBN introduced several new products in 2024. The introduction of the Diaspora Mortgage Loan, Rent Assistance Loan, and Non-Interest Home Loan products reflects FMBN’s commitment to innovation in housing finance.
The Diaspora Mortgage Loan, a collaborative initiative between FMBN, the Nigerians in Diaspora Commission (NiDCOM), and the Central Bank of Nigeria (CBN), is designed to help Nigerians living abroad invest in real estate back home. This product is poised to tap into the growing desire among the Nigerian diaspora to contribute to the development of their home country. By enabling Nigerians abroad to access mortgage loans to purchase homes in Nigeria, the product also promises to ease the country’s housing deficit.
Similarly, the Rent Assistance Loan is aimed at easing the financial burden of rental payments for low-income Nigerians, particularly those who struggle to access traditional home financing. The product is expected to launch in the first quarter of 2025 and will provide affordable and flexible loan options for tenants across the country.
Another innovative offering is the Non-Interest Home Loan, which caters to Nigerians who are averse to interest-based financial transactions. The product is expected to attract significant interest from Nigerian Muslims, particularly those who find it difficult to engage with conventional mortgage products due to religious reasons.
FMBN’s progress in housing delivery has been notable, with the bank financing the completion of 1,044 housing units across Nigeria in 2024. In total, the bank has 6,853 ongoing projects across 106 locations, ranging from urban centers to rural communities. These projects are designed to serve Nigerians across different income levels, with a focus on providing affordable housing for low- and middle-income families.
As part of its efforts to address the national housing deficit, FMBN is also playing a central role in the federal government’s Renewed Hope Cities and Estates Programme. Through this program, FMBN has provided N100 billion as an off-taker guarantee to support the construction of 3,112 housing units in Karsana, Abuja. The project is being spearheaded by the Federal Ministry of Housing and Urban Development, with FMBN’s backing ensuring that the homes are completed on schedule and are available for sale to Nigerians who contribute to the NHF scheme.
In addition to its efforts in affordable housing delivery, FMBN has contributed to economic growth by creating an estimated 171,325 jobs across various sectors of the housing and construction industries. This includes employment for engineers, architects, surveyors, and artisans, as well as those working in the supply chain for building materials and equipment.
FMBN has increasingly recognized the importance of collaboration in its efforts to achieve its housing delivery goals. Over the past year, the bank has strengthened partnerships with key stakeholders, including state governments, labor unions, and real estate developers, in a bid to expand its outreach and resources.
In particular, FMBN has partnered with the Kano State Government to re-integrate state civil servants into the NHF scheme. This partnership is expected to provide access to affordable home loans for thousands of civil servants in Kano, marking a key milestone in FMBN’s bid to ensure that all 36 states are participating in the NHF scheme.
The bank is also in discussions with the Shelter Afrique Development Bank to attract international investments for affordable housing in Nigeria. This collaboration aims to create more financing avenues and help bridge the financing gap in the housing sector.
Looking ahead, FMBN is setting ambitious goals for 2025. The bank aims to raise NHF collections to N211 billion, expand mortgage loan offerings by disbursing 4,200 homeownership loans, and issue 43,000 micro-loans for home renovation and improvement projects. The bank is also targeting the recovery of N93.7 billion in outstanding loans and is set to finalize the establishment of the National Mortgage Registry, which will streamline the mortgage process and reduce delays.
These goals are a reflection of the bank’s ongoing commitment to expanding access to affordable housing and supporting the federal government’s housing agenda. While challenges remain—particularly in terms of capital—FMBN’s leadership appears committed to addressing these obstacles and positioning the bank for sustainable growth.
Osidi’s leadership has undoubtedly brought a new sense of direction and purpose to FMBN. Through strategic reforms, improved customer service, new mortgage products, and strong partnerships, the bank has made measurable progress in its mission to address Nigeria’s housing deficit. With the foundation now set, FMBN is poised to play an even more significant role in Nigeria’s housing sector in the coming years, helping millions of Nigerians achieve the dream of homeownership.
The next 12 months will be critical as FMBN works to consolidate its gains and expand its impact across the country. If the bank’s momentum continues, it could be on track to become the key driver of affordable housing development in Nigeria, ensuring that homeownership is within reach for all Nigerians, regardless of their income level.
