As part of efforts in recovering debts, the Federal Mortgage Bank of Nigeria (FMBN) has set up machinery to go after debtors, expressing concern over subscribers’ failure to repay mortgages.
Consequently, the installation has inaugurated seven specialised loan recovery task teams to recover all the bank’s delinquent loans across the country.
The FMBN’s Chief Executive Officer and Managing Director, Shehu Osidi, during the inauguration of the teams in Abuja recently, said the move was also aimed at reducing non-performing loans.
According to Osidi, the step has become expedient to safeguard the financial interests of the bank and ensure the sustainability of its lending operations.
He said over the years, FMBN played a crucial role in providing affordable housing finance to Nigerians, thereby, contributing significantly to the achievement of the national housing agenda and the promotion of home ownership.
“However, the sustainability of these efforts hinges on our ability to recover loans effectively and reinvest them in future projects. Unfortunately, the bank has performed poorly in this regard.
“Loan recovery is a critical component of our financial management strategy. This is to ensure that funds are available for disbursement to new beneficiaries while maintaining the integrity of our lending operations.
“Despite the successes we have recorded in our home delivery efforts, we must acknowledge the enormous challenges we face with our Non-performing loans (NPLs)”, he stated.
According to Osidi, some of the NPLs are due to infractions from external parties and factors.
He noted that a huge chunk of the blame also lay with the firm as internal stakeholders are hand-in-hand with glaring administrative and operational inefficiencies.
Osidi stated further that going forward, staff would be held accountable for the outcome of credit decisions in which they have played critical roles.
He said the strategy adopted by FMBN in the loan recovery endeavour was to follow a different path by challenging “ourselves to deliver tangible results in pursuance and defence of our common destiny.
“The inauguration of these teams marks a significant milestone in our ongoing efforts to enhance the financial stability and operational efficiency of the bank”.
He continued that the mandate of the task teams included conducting desk reviews of assigned loan portfolios, the history of loans, houses on the ground, the state of collaterals, outstanding balances, and personalities behind the loans.
He added that the team would look at the segmentation of the loans and the chances of recovery, develop an overreaching recovery strategy, engage relevant stakeholders, and use both conventional and informal but acceptable strategies to carry out the recoveries.
He said in case the team decides to resort to security agencies or the court, such action should not be taken without the executive management’s approval.
Osidi also said the team would be required to render regular updates and progress reports to the executive management and track the progress of debt recovery efforts.