Accessing the National Housing Fund (NHF) for most Nigerians is like a camel passing through the eye of a needle, as various products established to ease homeownership for subscribers have been poorly managed due to lack of transparency and accountability on the part of the apex mortgage firm, VICTOR GBONEGUN reports.

Thirty-One years after the National Housing Fund (NHF) scheme was established to mobilise funds for the provision of affordable houses for low-income workers and long-term loans to mortgage institutions, many contributors are yet to have roofs over their heads.

The scheme is for all sectors of the economy, particularly those within the low and medium-income levels, who cannot afford commercial housing loans such as civil servants, traders, artisans, and commercial drivers. Each employee that contributes 2.5 per cent of his/her monthly basic salary is qualified to access the loan.

The pool of funds created by the contributors nationwide becomes available to any contributor to borrow from, after contributing for a minimum of six months. A contributor is eligible to access a maximum loan of N15 million repayable over a maximum period of 30 years, at an affordable interest rate of six per cent.

A prospective homeowner is expected to, at least, pay approximately N10,000 per month over the period depending on the type of house he/she is applying for.

According to figures obtained from the FMBN, in 31 years of the scheme (1992 to July 2023), the sum of N656.127 billion was received as contributions from the NHF scheme.

Essentially, out of a potential national working population of 90 million, majority of individuals are still not contributing as only 5.6 million workers contributed, while the total number of housing constructed so far is 38,020 units. Data further shows that 24,322 mortgage loans were created, out of which N92.41 billion was disbursed as Home Renovation Loans to 113,948 beneficiaries.

About N225,967 million was disbursed as NHF Individual Construction Loan, which was introduced recently by the bank.  Also, N67.416 billion was refunded to the NHF retirees. The refund figure is for 440,222 retirees.

One of the major problem that is bedeviling the scheme is that the FMBN has not digitised its processes. The Guardian gathered that it could take more than three months on average, to process a mortgage facility from the NHF. This undue delay in processing applications has been fingered as partly responsible for the low patronage of the scheme.

The Guardian learnt that most of the time the applications are delayed by PMBs due to their internal processes. The quarterly approval posture of loans by the board also contributes to the delay and lack of availability of interim security to draw down.

Currently, workers in 34 states comply with the NHF Act. Among the non-salaried informal sector, about 21,320 informal sector workers have been registered through 1,078 cooperative societies as contributors to the fund. While some have not registered at all, some registered and deducted, but never remitted at all, or as at when due.

However, the challenges facing the scheme are enormous and have rendered it ineffective. Some of them include poor documentation of contributors, high-interest rates, ineffective foreclosure process, difficulty in issuance of certificates of occupancy and low contribution of funds by Nigerian workers, comprising the Nigerian Labour Congress (NLC), and Nigeria Employers’ Consultative Association.

Also contributing to marring the system is the high default rate experienced by the Primary Mortgage Banks (PMBs), job losses by workers, the demise of mortgagors, and unwillingness of the customers to repay as well as non-payment by employers.

There is also reluctance of workers in accounts departments of various establishments to update the passbooks of their staff members (colleagues), which makes it difficult for them to know their contributions, which form the basis for loan applications.
With the lack of transparency in the scheme, the House of Representatives ad-hoc committee recently instituted a probe on the alleged non-remittance and utilisation of housing funds from 2011 to date.

The committee headed by the panel chairman, Dachung Bagos, raised concerns regarding why over N267 billion of workers’ investments in the NHF in 2019 alone were not remitted. The chairman also noted that 54 insurance firms refused to remit huge sums to FMBN.

Another major challenge that findings reveal is the fact that contributors’ income cannot afford the houses available under the scheme, which cost between N20- N25 million in Lagos (for a two-bedroom apartment) and above N25 million in some major city centres in the country. The majority of housing developers target the wealthy, instead of addressing the needs of the most vulnerable workers, who earn a minimum wage of N30,000.

The Minister of Housing and Urban Development, Ahmed Dangiwa, who was the former managing director of FMBN, recently said that despite making the statutory contributions of 2.5 per cent of their yearly salaries to the NHF, many workers were unable to access the loan owing to administrative bottlenecks. This, it was learnt, often force many to abandon their pursuit of loan.

Dangiwa said the situation forced many workers to resort to third-party agencies to fast-track the loan application at unofficial fees, thus creating the perception of corruption in the process of housing loan approval and disbursement.

Worried by the difficulties that workers encounter in accessing the fund, the NLC recently threatened to withdraw civil servants from the scheme. President of the NLC President, Joe Ajaero, while appearing before the ad-hoc committee investigating the NHF scheme, criticised the FMBN for its poor management of the funds accumulated from contributors.

Ajaero noted that although the government had consistently deducted the mandated 2.5 per cent from workers’ salaries, the bank failed to inform the workers about the deposits made into their NHF accounts. He also said that the lack of communication has created frustration among workers.

The Executive Director of Housing Development Network, Mr. Festus Adebayo, stated that some workers have benefited from the NHF scheme, but the bad news remains that a large number of contributors have not enrolled.

Adebayo observed that at a time, Nigerians were complaining that they didn’t have enough education about accessing the fund.  However, he noted that enlightenment about the scheme has increased through efforts of the FMBN and other advocacy groups, just as he emphasised the mystery of how much a worker who earns N30,000 monthly can afford to buy a house.

He said: “That is the biggest problem threatening the NHF. The law setting up the NHF needs to be reviewed; it has become obsolete. The amount that a worker will benefit from the fund has to be increased. They don’t need to increase the 2.5 per cent monthly contributions of the basic salary, but workers’ salaries must be increased. With the removal of fuel subsidies, the largest percentage of the worker’s salary is spent on transportation. The removal of fuel subsidy has created a multiplier effect on rent; building materials like cement and iron rod, in which most of them are imported.”

He said that the nation’s housing crisis can only be solved through government intervention, adding that the private sector can be of great asset if an enabling environment is created. “Before now, many estate developers collected money from the FMBN through estate development loans but didn’t deliver the houses.

“This is one of the biggest threats to FMBN and banks in Nigeria. So, if you look at the number of houses that they have built compared to the money that they have collected, we cannot totally blame the bank but also have to blame some of the operators who took loans without delivery of projects. Corruption is a problem in the housing sector and victims are now the contributors – civil servants,” he said.

“The sector must be regulated to reduce the number of criminally-minded operators. When the FMBN is recapitalised more people can benefit from the scheme. Some of the workers steal because there is no hope for them to buy a house,” he added.

A mortgage expert, Mr. Gboyega Olorunfemi, said a major challenge with the scheme is that a large number of people who applied to access some of the facilities were not eligible based on the minimum requirement.

He said: “Many workers are already indebted and a certain percentage of their net salaries are also being utilised to offset existing facilities, which are not mortgage related. When they tried to access the mortgage facility even under the NHF scheme, what is now available is no longer able to carry their expected monthly payment for the NHF facility.”

Olorunfemi, a former staff of LivingTrust Mortgage Bank, formerly Omoluabi Mortgage Bank Plc., explained that where contributor’s funds are never remitted to the NHF scheme, the appropriate workers’ union has to ensure that the workers’ remittances get to the appropriate channel.

While noting that not many people have enough savings to put forward as an initial deposit to be able to access the fund. The former mortgage banker said that workers have the right to flag it if at the end of the month, they do not receive notification of their monthly remittances through the appropriate channel.

“I think the fact that contributors don’t receive notification or can’t have access digitally to the FMBN platform to see their contributions allows employers to hold up and pay at a time that is convenient for them. The FMBN has to digitised its processes,” he said. He stressed the need for transparency and the review of the entire housing landscape, as well as ensuring speed in the delivery of sustainable housing.