Mortgage Institutions Get Recapitalisation Deadline

In a bid to strengthen housing financing across the country, the nation’s Apex Bank; the Central Bank of Nigeria (CBN) has given a deadline within which all the mortgage banks and other Primary Mortgage Institutions (PMIs) engaged in housing finance in Nigeria will recapitalise.

A release from the other Financial Institution Department (OFID) of the CBN which was made available to The Tide has given December, 2012 as the deadline for the recapitalisation of all mortgage institutions across the country.

According to the CBN release, every mortgage bank that wants to operate as a national mortgage institution will recapitalise with N5 billion, while those that want to operate as state mortgage institutions will have to recapitalise with N2.5 billion and will operate within the state.

Explaining the reasons for the new directive, the director, Other Financial Institution Department, Femi Fabanwo said the essence is to strength the mortgage banks so as to enable them provide long term mortgage financing.

He said that what the CBN has in view was to create avenues for establishment of at least one viable mortgage bank in each geo-political zone across the country, and that every institution that recapitalised as a state mortgage, will not be allowed to operate in other states, as only the ones that recapitalised as a federal institutions will be allowed to operate across the country.

It would be recalled that the initial amount required for recapitalisation by the mortgage institution as was made public in 2003 was N100 million, and it is hoped that the purpose for which the new sum of money, is being required for recapitalisation will be adequately realisable.