Business

Government must play a major role for the mortgage sector to thrive – CEO, Abbey Mortgage Bank

Published

4 years ago

February 1, 2021

The Managing Director/CEO of Abbey Mortgage Bank has given an overview of the mortgage bank industry in Nigeria, what inspired the establishment of Abbey Mortgage Bank, and the challenges encountered on the way.

Speaking during the Nairametrics’ Business Half Hour, Madu Haman gave a brief background of his journey into the financial industry.

“I graduated from the university in 1982, started my banking career in 1984 with the then Bank of Credit & Commerce, which was later converted to African International Bank (Afribank). In 1990, I joined the merchant bank now called the New World Merchant Bank. Then in 1992, I left New World Merchant Bank to join Abbey Building Society, which is now Abbey Mortgage Bank,” he said.

According to Mr. Madu, what motivated the establishment of Abbey Mortgage Bank was the Mortgage Institution Act that was enacted in 1989. It was an opportunity to provide housing finance to Nigerians. So, in 1992, they got licensed and since then, the business has grown.

He continued by saying that currently, their aim is to replicate in Nigeria what is obtainable in a more developed economy like the UK, where housing finance is affordable and available to everyone.

During the session, he stated that nothing came easy, especially when it came to establishing a business, so, they had their pitfalls during inception though they were able to scale through, with the help of the initial promoters who had experience in banking.

Speaking about funding, Mr. Madu noted that their initial capital when they started in 1992 was N5,000,000, which the promoters were able to gather from friends. Since then, they have gradually been increasing the capital. In 2005, they became a public limited liability company and got listed on the Nigerian Stock Exchange in 2008, which gave them a wider market for raising capital.

Abbey Mortgage Bank, according to Madu, is in partnership with private sector providers, most of whom are real estate developers who provide the houses for them to grant mortgages on. He noted that the partnership is with credible developers, who have the type of houses that meet the requirement of customers. The bank is also in partnership with notable cooperatives, whose members want to access housing finance.

According to him, Nigeria’s patronage of mortgage banks is very low. He said even at the African level, Nigeria is way below when it comes to a mortgage. He stated that currently, the mortgage sector constitutes just about 2.5% of our GDP compared to the United Kingdom where the contribution is 80%, while South Africa contributes 50% to 60% of their GDP, and Ghana has close to 30% GDP contribution. In other words, Nigeria needs to step up her game when in the mortgage sector.

He said for this to be feasible, the Government has a major role to play in terms of providing the right environment for the mortgage sector to thrive. Speaking further, he said there are many challenges that affect the mortgage sector, most of which have to do with the government. For example, the Land Use Act, which makes the process of land acquisition very difficult and expensive. Speaking further, he stated that what made land acquisition difficult are the processes one must undergo, such as:

1. The process of getting the Governor’s consent

2. The bureaucratic process of registering the mortgage

3. The cost of registration being exorbitant.

During the session, Haman noted that the government could assist in reducing some of these challenges. The plan to address the various challenges facing the mortgage sector started as far back as 2001 when the then President, Olusegun Obasanjo, formed a presidential committee to review the legal framework around the mortgage sector, especially amending the Land Use Act and other issues concerning the smooth operation of the mortgage sector.

However, before the approval of such an amendment, another government took over which automatically led to starting the process all over.

Furthermore, he said they had to establish an advocacy association for the mortgage Industry called the Mortgage Banking Association of Nigeria and their work is to take care of these issues that the mortgage sector is facing. He said they also have other institutions, like the Nigerian Mortgage Finance Company, which is partly owned by the participating banks and partly owned by the Federal Government (the Federal Ministry of Finance and CBN are also involved). The role of this institution is advocacy, i.e., trying to address the challenges facing the mortgage sector.

Also, they have been talking to state governors to see how each state can amend some of their laws to make it easier and smoother for mortgage sectors. However, he noted that some states like Lagos and Kaduna have been very cooperative. More so, the engagement continues with various other states that are willing to participate in the provision of housing for their citizens.

Additionally, he clarified the issues some Nigerians encounter when it comes to accessing NHF loans. He said the Federal Mortgage Bank is a custodian of the National Housing Fund, so for a contributor to be able to access facilities from the National Housing Fund, they must approach a primary mortgage bank which then processes their request and forwards it to the Federal Mortgage Bank for approval. He added that before NHF can give out a loan, it will have to check out the following:

· The property involved.

· Does it have a proper title?

· What is the applicant’s source of income?

· Would he be able to meet the repayment of the loan?

All these processes are done at the primary mortgage bank-level before being forwarded to the Federal Mortgage Bank for approval, and then the Federal Mortgage Bank also goes through its own process of checking. With all these processes, one might look at the loan request as a difficult one, however, the rate at which you get the facilities is only 6% which is the lowest facility you can get in the Nigerian market right now.

In conclusion, he said that Abbey has a very good pedigree, and they been in the market for almost 29 years now. He continued by saying that Abbey mortgage bank is presently the oldest and the largest mortgage bank in Nigeria and they are currently doing the Right Issues which was opened on the 4th of January for their existing shareholders to invest more on.

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FIRS ANNOUNCES AN ONGOING RECRUITMENT

Published

48 minutes ago

December 23, 2024

Sahara Weekly

FIRS ANNOUNCES AN ONGOING RECRUITMENT.

The Federal Inland Revenue Service (FIRS) has rolled out an exciting opportunity for experienced professionals to join its team.

In a public notice via its X handle, the agency announced job openings for positions like Assistant Manager, Deputy Manager, and Assistant Director in fields such as Tax, Public Relations, Legal, ICT, and Risk Management.

Interested candidates are encouraged to review the eligibility criteria and apply via the official portal at careers.firs.gov.ng before January 11, 2025. This recruitment drive is aimed at bolstering public service efforts and maximizing national development.

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UBA GMD Calls for Public-Private Collaboration, Joins Aviation Minister to Commission New MMIA Departure Section

Published

18 hours ago

December 22, 2024

Sahara Weekly

UBA GMD Calls for Public-Private Collaboration, Joins Aviation Minister to Commission New MMIA Departure Section

The newly renovated departure section of the Murtala Muhammed International Airport, Lagos, refurbished by United Bank for Africa (UBA) Plc, was officially commissioned on Friday, December 20th, 2024.

The laudable project, which marks a transformative moment in Nigeria’s aviation sector, underscores UBA’s unwavering commitment to national development and highlights the immense value of strategic public-private partnerships (PPPs).

The ceremony was graced by distinguished stakeholders, including the Honourable Minister of Aviation and Aerospace Development, Festus Keyamo, SAN; the Managing Director of the Federal Airports Authority of Nigeria (FAAN), Mrs. Olubunmi Kuku; other Directors, and Heads of Agencies operating at the Airport.

Speaking at the event, UBA’s Group Managing Director/CEO, Oliver Alawuba,lauded the collaboration that brought the project to fruition as he emphasised the need for public and private institutions to come together to build and revamp the nation’s assets.

“This renovation is a testament of UBA’s belief in the transformative power of investing in national assets. By modernising our airports, we not only enhance infrastructure but also position Nigeria as a global hub for tourism, trade, and investment,” he stated.

Alawuba took time to highlight the broader economic impact of such initiatives, urging increased private-sector participation in national development. “Public-private partnerships like this demonstrate what can be achieved when we unite for a shared vision of progress and investing in infrastructure catalyses economic growth, improves travel experiences, and creates opportunities across various sectors of the economy,” he added.

Alawuba reflected on the power of unity and collaboration, quoting Helen Keller: “Alone we can do so little; together we can do so much.” The commissioning of the renovated departure section serves as a reminder of what strategic partnerships can achieve in driving national development and elevating Nigeria’s global standing.”

While commissioning the project, Keyamo commended UBA for executing the project, a feat he termed a landmark achievement in Nigeria’s aviation sector. “This renovated departure section exemplifies the bank’s commitment to elevating aviation infrastructure, improving passenger experiences, and fostering international partnerships. It is a proud moment for the ministry and all stakeholders involved, and I thank the management of UBA for pioneering this initiative,” he remarked.

The minister highlighted other key achievements of his ministry, including compliance with the Cape Town Convention, the launch of a consumer protection portal, and advancements in major infrastructure projects such as the second runway at Abuja Airport and solar energy integration in airport operations.

The Managing Director/Chief Executive of FAAN, Mrs. Olubunmi Kuku, commended UBA and other stakeholders for their contributions, adding, “This project reflects FAAN’s dedication to delivering world-class aviation infrastructure. The enhanced departure section not only elevates passenger experiences but also strengthens Nigeria’s competitive position in global aviation,” she said.

She called for more private-sector participation, emphasising that “partnerships like these are essential to transforming the aviation sector into a beacon of excellence.”

The newly renovated departure section boasts cutting-edge facilities designed to enhance efficiency and passenger comfort. This upgrade reaffirms the Murtala Muhammed International Airport’s status as a critical gateway to Nigeria and a major hub for international travel in Africa.

United Bank for Africa is Africa’s Global Bank. Operating across twenty African countries and the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge technology. UBA is one of the largest employers in the financial sector on the African continent, with 25,000 employees group wide and serving over 45 million customers globally.

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Dangote Hails Tinubu on Impact of Crude for Naira Swap Deal

Published

2 days ago

December 21, 2024

Sahara Weekly

Dangote Hails Tinubu on Impact of Crude for Naira Swap Deal

…As Dangote Refinery partners MRS to sell PMS at N935 per litre nationwide at its retail outlets

Sahara Weekly Unveils That The Foremost entrepreneur and President of the Dangote Industries Limited, Aliko Dangote has commended President Bola Ahmed Tinubu for the positive impact of the naira for crude swap deal on the Nigerian economy, which has led to reduction in prices of petroleum products in the country.

To provide succour to Nigerians, Dangote recently reduced the price of Premium Motor Spirit (PMS) from N970 to N899.50 at its Refinery loading gantry and provided generous credit terms to marketers.

“To ensure that this price reduction gets to the end consumer, we have signed a partnership with MRS to sell petrol from its retail outlets nationwide at N935 per litre” he added. This price has already commenced in Lagos, and it will be offered nationwide from Monday.

In his statement, he called on other oil marketers such as the NNPC Retail and all other marketers, “to work with us to ensure that Nigerians enjoy high-quality petrol at discounted prices.”

According to him, “The Dangote Refinery is for the benefit of Nigeria and Nigerians. We will therefore continue to work with various value chain players to deliver high quality petrol at cheaper prices. Our aim is for all Nigerians to have ready access to high quality petroleum products that are good for their vehicles, good for their health, and good for their pockets.

Recall that in September, the Federal Executive Council (FEC) under the leadership of Mr. President approved the sale of crude to local refineries in Naira and corresponding purchase of petroleum products in Naira. The move, which commenced on October 1, led to reduced pressure on the dollar and ensured the stability of the local currency.

Dangote thanked Nigerians for their unwavering support and the government for creating an enabling environment for the domestic refining industry.