Mortgage Banks, CBN Hold Talks Over Expansion Plans

Mortgage firms are seeking for new strategies to flesh up their operations in the housing finance industry, and have taken decisions on critical success factors that would ensure continuity and viability of the sub-sector in Nigeria.
With the mortgage sub-sector still caught in a battle for survival, the umbrella body of Primary Mortgage Banks (PMBs) has begun constructive engagement with the Central Bank of Nigeria (CBN) for an expansion of the permissible activities for the banks in the revised operational guidelines.
The Mortgage Banking Association of Nigeria (MBAN) acknowledged that PMBs in particular, as well as mortgage banking sub-sector in general needed to be more profitable and record higher Return on Investment [ROI) to grow the business horizons and attract new investors.
Under the revised operational guidelines, primary mortgage banks were not allowed to grant consumer or commercial loans, leasing, estate agency or facilities management, project management for real estate development and management of pension funds/schemes.
The banks are permitted to engage in mortgage finance, real estate construction finance within the permitted limits, acceptance of savings and time\term deposits, acceptance of mortgage-focused demand deposits, drawing from mortgage funds such as National Housing Fund Facility for on-lending and financial advisory services for mortgage customers.
This was part of the discussions by the delegates at the Year 2019 Annual Chief Executive Officers (CEOs) Retreat held in Lagos, hosted by MBAN, which attracted Managing Director/CEOs of mortgage banks; mortgage brokerage companies; representatives of statutory regulatory/supervisory agencies as well as key stakeholders and corporate companies in the sub-sector.
The delegates suggested the need to embrace “Mutual Shared Services” that would evolve from “shared Model Information Technology (IT) Infrastructure for PMBs in Nigeria to be driven by MBAN.
The idea was mooted as a collaborative approach to deploying IT Solutions by all mortgage banks since the major challenge faced by financial institutions up till now has been the huge capital outlay required to set it up, traceable mainly to the high cost of infrastructure, and integration.
To achieve this, it was proposed that MBAN should come up with strategic initiatives towards “unified and shared services IT infrastructure /platform” with a view to adopting the collaborative approach for improved operational performance and profitability of PMBs’ as well as reducing the risk vulnerabilities in all ramifications.’
Meanwhile, in communiqué signed by MBAN President and Executive Secretary/CEO, Adeniyi Akinlusi and Kayode Omotoso respectively, they said the association resolved that PMBs would be contributing effectively to the development of the sub-sector when they respond promptly to request from the secretariat for data on mortgage loans as well as other activities that would make possible the collection, collation, and analysis of same.