By Odunewu Segun
Managing Director of the Federal Mortgage Bank of Nigeria, Gimba Kumo has call for the recapitalization of the Bank from the current N5 billion capital base to N250 billion to further empower the bank to meet the housing challenge in Nigeria.
While addressing the Senate Committee on Banking and other Financial Institutions on Tuesday 26th, Kumo said commercial banks and insurance companies have defaulted payment of its contribution to housing scheme, and the Central Bank of Nigeria is doing nothing to ensure compliance.
“Even with the N5 billion, it is only the Federal Government that has paid its own share of 50 per cent, CBN that has 30 per cent is yet to pay, the Nigerian Social insurance Trust Fund which has the remaining 20 per cent is yet to pay,” he said.
He said that the FMBN was in dire need of the contributions to meet the over 16 million deficit in the housing sector and urged the Senate to assist the bank. He also called on the Senate to also look into the huge money in the pension funds which can also be used to fund housing in Nigeria.
Kumo explained that since 1992, these financial institutions ignored the Act which compelled them to contribute. “This has not been complied with since 1992, we have been following up with the CBN but nothing has been done so this is an area that we need you support to ensure that the law is enforced,” he said.
He said section 5 of the NHF Act provides that commercial banks are supposed to invest 10 percent of their portfolio to the fund while Insurance companies on their part are supposed to invest 20 per cent of their life insurance funds and 25 per cent of their non-life funds into the fund.
“Section 11 provides that where the bank refuses to pay, the CBN is supposed to force the banks to contribute to the fund at an interest rate of four per cent.”
He added that Babatunde Raji Fashola, the minister of Power, Works and Housing has called for immediate payment of the CBN and the NSITF. He also added that the bank are about to complete 67,000 housing units and was currently targeting 72,000 new houses to be spread across the country through the help of the National housing scheme