mortgage house

FG begins full commercialization of Federal Mortgage Bank

As part of ongoing reform in the Housing sector, the federal government (FG) has commenced a process that would see the repositioning of its owned Mortgage Bank (FMBN) as a profitable entity.

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Alex Okoh, director-general, Bureau of Public Enterprises (BPE), said efforts to reposition the bank are for optimum performance and to bridge the country’s huge housing deficit estimated at 22 million as at 2019.

Consequently, the BPE on Wednesday inaugurated an 8- member committee for the Full commercialisation and recapitalisation of the Bank.

The Joint Technical Committee (JTC) which has 60 days to conclude set task comprises four members each from the Bureau of Public Enterprises (BPE) and the Federal Mortgage Bank of Nigeria (FMBN).

The Committee is expected to among others things; conduct a diagnostic review of the Bank’s existing institutional framework, organisational structures and operational modality.

The committee would review and harmonise all existing policies, law and regulations governing mortgage banking in Nigeria in order to identify areas that would facilitate the implementation of full commercialization and recapitalization of the FMBN.

The Committee is also expected to harmonise and synchronize all the reform processes of the FMBN with the ongoing reform of the Housing sector; develop strategies on how to reform FMBN that would enable it to raise funds from the money and/or capital markets without government guarantees.

It would further undertake a review of the legal, institutional and operational frameworks of mortgage banking in a few African counties and other emerging economies with a view to learning from their key success factors (KSFs) that can be replicated.



CBN Mandates Banks To Enrol For Credit Risk Management In System

In pursuit of a, sound financial system in Nigeria, the Central Bank of Nigeria, CBN, has asked all Development Financial Institutions (DFMs), Micro Finance Banks MFBs, Primary Mortgage Banks (PMBs and other Financial companies to enrol for the Credit Risk Management (CRMS).

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The apex bank said the redesign CRMS would help improve the Credit Risk Management of the financial sector, thereby promoting safe and sound financial system in the country.

In a circular, FPRD/DIR/PUB/CIR/01/002, dated April 8th and released on Monday by Kelvin N. Amugo, Director Financial Policy and Regulation Department, the CBN Mandated all DFIs, MFBs, PMBs, FCs are required to report all credit facilities (principals and interest) to the CRMS and to update same on monthly basis.

“As part of its effort to promote a safe and sound financial system in Nigeria, the Central Bank of Nigeria (CBN) introduced the CRMS to improve Credit Risk Management in commercial, merchant, non- Interest banks as well as to prevent predatory borrowers from undermining the banking system.

With the successful implementation of the CRMS in deposit money banks, it has become expedient to commence the enrolment of other financial institutions (OFIS) on the CRMS platform.”

The regulator also stated that Bank verification Number (BVN) and TAX identification Number (TIN) would be needed to undertake the CRMS process.

“Accordingly, all DFIs, MFBs, PMBs, FCs are required to report all credit facilities (principals and interest) to the CRMS and to update same on monthly basis. OFIs shall note that Bank verification Number (BVN) and TAX identification Number (TIN) are the only basis for regulatory renditions.

“To ensure full compliance,  OFIs are reminded to conclude the tagging of all live credit files for all individual and non individual borrowers with BVN and TIN respectively by May 14, 2021.

According to CBN, Other financial institutions should avail themselves with regulatory guidelines, adding that stiff penalties await those who fail to comply with the directives

“Furthermore, the concern  OFIs are advised to acquaint themselves with the regulatory guidelines for the operation of the redesigned CRMS for commercial, merchant and non- interest Banks in Nigeria(February 2017) and the additional regulatory guidelines of separation 2017.



AFCFTA: DBN gives first tranche of N1 billion MSMEs fund to LivingTrust Mortgage Bank

The aforementioned reforms and policy interventions provide the needed environment for small businesses in Nigeria and the coming of the AfCFTA could not have been at a better time.

Independent of the AfCFTA, the Federal Government of Nigeria has in recent times embarked on some far-reaching reforms aimed at enhancing ease of doing business both for the Small and Medium-sized Enterprises (“SMEs”) and across other strata of business in Nigeria.

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Some of these reforms can be seen in the areas of policies, laws, business formation and registration, post-incorporation filings and taxation.

Two of the legislative instruments which are critical to these reforms deserve some mention here:

Companies and Allied Matters Act, 2020 (CAMA, 2020)

The signing of CAMA, 2020 into law by President Muhammad Buhari on 7th August 2020 came as a very cheering news to the SMEs community.

Some of the provisions which impact directly on SMEs include but not limited to the following

(i) a single member/shareholder for a private company

(ii) minimum share capital in place of authorized share capital. This allows promoters of business to pay for only shares that are needed at the point of incorporation;

(iii) exemption of SMEs, small companies or companies with single shareholders from the requirement of appointing Auditors to audit their financial records

(iv) filing, share transfer and meetings can be done electronically by private companies

(v) Statement of compliance which was hitherto signed by legal practitioners can now be signed by the business owner or his agent

(vi) introduction of Limited Partnerships and Limited Liability Partnership thereby providing options for promoters who may want to incorporate partnership instead of limited liability companies

(vii) Appointment of company secretary now optional for private companies

(viii) AGMs and other company meetings can now be held virtually, amongst other reforms.

Finance Act, 2020

Complementing the reforms under the CAMA 2020 is the Finance Act.

Enacted first in 2019, the Act was further expanded and re-enacted to among other things address the negative impacts of COVID 19 on small businesses and this led to the new Finance Act, 2020.

The new Finance Act was signed into law on 31 December 2020 and took effect from 1st January 2021.

It introduced over 80 amendments to 14 different laws such as the Personal Income Tax Act, Companies Income Tax Act, Capital Gains Tax Act, Value Added Tax Act, Customs & Excise Tariff Act, Tertiary Education Trust (TET) Fund Act, Fiscal Responsibility Act, Public Procurement Act, CAMA, Nigerian Export Processing Zone Act and Oil and Gas Export Processing Free Zone Act.

SMEs are expected to take advantage of the incentives provided under the new Act.

SMEs with a turnover of less than N25 Million are exempted from Companies Income Tax and TET tax amongst other incentives.

SMEs engaged in primary agricultural production are qualified for pioneer status for an initial period of four years and an additional two years.

MSME Survival Fund

In a bid to ameliorate the impact of COVID-19 on small businesses, the Federal Government of Nigeria launched the N75 Billion Survival Fund for Micro, Small and Medium Enterprises (MSME).

The Fund which was touted as part of the economic sustainability Plan of the Federal government is meant to support small businesses to meet basic operational needs and provide funding in order to boost the production capacity of MSMEs in Nigeria.


The aforementioned reforms and policy interventions provide the needed environment for small businesses in Nigeria and the coming of the AfCFTA could not have been at a better time.

The critical question remains, how SMEs can leverage the opportunities provided under the AfCFTA to scale up their operations.

SMEs are often considered the economic backbones particularly in developing countries as they account as major contributors to the GDP and in the area of job creation.

Nigeria has a vibrant SME ecosystem. Out of the 95 Million SMEs in Africa, over 45 Million of them are in Nigeria.

Thus, on the continent Nigeria plays a huge role, accounting for close to 50% of SMEs.

In terms of economic impact, SMEs contribute 48% of national GDP in Nigeria, make up the 96% of businesses and contribute 84% of employment.

Despite the contribution to the economy, SMEs in Nigeria in particular, have continued to grapple with the challenges of high cost of capital and lack of access to funding as well the inability to compete globally.

Due to the largely informal nature of SMEs in Nigeria, obtaining data for the purpose of planning has also been difficult.

On this, the role of Small & Media Enterprises Development Agency of Nigeria (SMEDAN) in amongst other things, formalization of SMEs in Nigeria should be encouraged.