AS deadline for recapilisation of 90 Primary Mortage Banks (PMBs) in the housing finance sub-sector expires today, the Central Bank of Nigeria (CBN) may release the list of successful operators on January 2, 2014 . Last March, CBN extended the deadline from April 30 to today following the PMBs’ request for more time. Under the revised guidelines for PMBs, those operating nationally are to raise their capitals to N15billion and state operators, N2.5billion. In a circular, the apex bank said the shift in date was meant, ” to afford all affected PMBs sufficient time to exercise any of the options for capital raising, business combination and downscaling. ”All PMBs are once again strongly advised to conduct due diligence and seek professional advice in exercising any of the options and to conclude the processes before the new deadline in order to allow sufficient time for capital verification and necessary regulatory approvals.’’ The circular added: ”All directors, particularly the Managing Directors/ CEOs of all PMBs, are again reminded that prior approval of the CBN is required before the disposal of assets of the bank, as they will be held jointly and severally liable for any asset stripping.“ Under the fresh guidelines, mortgage firms were categorised into national and state mortgage firms, while the national PMIs are allowed to operate in any or all parts of the federation after the payment of a new N5 billion minimum paid up capital, the state’s PMIs are restricted to only one state at the payment of N2.5 billion. But it is not clear yet those who have complied so far. Mortgage Banking Association of Nigeria (MBAN) President, Femi Johnson could not ascertain the number of those that have met the requirement. He said: ``I don’t know the numbers of mortgage banks that have met the deadline, but I know some will not meet it. CBN has all the figures. It is impossible for all to meet the deadline, though a lot of people will meet it. It is the CBN that will audit the account of the mortgage banks to know if they meet the consolidation deadline. ”Not all will meet it, people will tell you stories and some that are not able to meet it will definitely become Micro-Finance Companies (MFCs). It is the CBN that will determine that.“ MBAN Executive Secretary, Mr. Kayode Omotosho would also not hazard any guess. According to him, all operators would be willing to comply. ”It is when the deadline elapses that we will know those who meet it and those who fail to meet the deadline. They are all prepared and it is CBN that will determine that.“ The total assets base of the mortgage banking industry stood at N357.1 billion as at December 2011 , while the four largest PMBs listed on the nation’s capital market accounted for 39 per cent of industry’s total asset and 54 per cent of loans. As at press time, it could not be ascertained how many PMBs have met the requirements. The apex bank spokesperson, Mr. Ugochukwu Okoroafor , who was on Christmas break, spoke with The Nation on phone and promised to give an update later. Some officials of MBAN, who spoke on condition of anonymity said they are at a loss about those who have met the requirements. ”No one knows those who have recapitalised. CBN may make the list known by January 2,“ said one of them. According to experts, there are many factors why the mortgage market is not thriving well. These include underwriting standards, high cost of property transaction, lack of a secondary mortgage market, housing supply deficit, weak capital, poor legal framework, titling challenges, high cost of funds, absence of MRC and dearth of long term funds. To mitigate these, government is planning to increase the number of mortgage loans from the current 20,000 loans to over 200,000 loans within the next five years. One of the new initiatives to facilitate this is the establishment of the Nigeria Mortgage Refinancing Company (NMRC), which is set up to be a secondary mortgage bank to refinance mortgages originated by mortgage banks and commercial banks. The World Bank has already put down $300 million as a 40-year loan with a low interest rate to the company. The company is primarily owned by Mortgage Banks and Commercial banks, with a startup capital of N6 billion and it will be private sector owned and operated.
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