Federal Mortgage Bank Targets Defaulters with Specialised Loan Recovery Teams
The Federal Mortgage Bank of Nigeria (FMBN) has expressed serious concerns over the failure of subscribers to repay their mortgages, prompting the establishment of seven specialised loan recovery task teams. These teams are tasked with recovering the bank’s delinquent loans across the country, a move aimed at reducing non-performing loans and ensuring the sustainability of its lending operations.
Speaking at the inauguration of the teams in Abuja, FMBN Chief Executive Officer and Managing Director, Shehu Osidi, emphasised the urgency of the initiative. “The step has become expedient to safeguard the financial interests of the bank and ensure the sustainability of its lending operations,” Osidi stated. Over the years, FMBN has played a crucial role in providing affordable housing finance to Nigerians, significantly contributing to the national housing agenda and promoting home ownership.
“However, the sustainability of these efforts hinges on our ability to recover loans effectively and reinvest them in future projects,” Osidi continued. He acknowledged the bank’s poor performance in loan recovery and highlighted the necessity of this effort for maintaining the integrity of FMBN’s 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.”
Osidi attributed some of the non-performing loans (NPLs) to infractions from external parties and factors but also acknowledged internal administrative and operational inefficiencies. He stated that going forward, staff would be held accountable for the outcomes of credit decisions in which they have played critical roles. “The strategy adopted by FMBN in the loan recovery endeavour is to challenge ourselves to deliver tangible results in pursuance and defence of our common destiny,” he added.
The mandate of the task teams includes conducting desk reviews of assigned loan portfolios, evaluating the history of loans, assessing the state of collaterals, and identifying the personalities behind the loans. They will segment the loans by recovery potential, develop overarching recovery strategies, engage relevant stakeholders, and employ both conventional and informal but acceptable strategies to carry out the recoveries. Any decision to involve security agencies or the courts will require executive management’s approval.
Osidi highlighted the importance of regular updates and progress reports to the executive management, alongside implementing measures to prevent future NPLs, such as developing risk mitigation strategies and enhancing the credit assessment process. The teams are segmented along geopolitical lines, each responsible for handling delinquent loans within its jurisdiction. For example, Dr. Kabir Yagboyaju leads the team for the Federal Capital Territory, Mr. Jibo Ibrahim for the North-West, Timan Elayo for the North-Central, and Mr. Gbenga Babade for the South-West.
The initiative’s urgency is underscored by the ten-week deadline for the teams to complete their assignments, with two weeks dedicated to desk reviews and eight weeks for the recovery efforts. Commenting on the task, Executive Director of Business Development and Portfolio Management, Chinenye Anosike, congratulated the team members and urged them to work diligently and deliver results within the expected timeframe. Similarly, Executive Director of Loans and Mortgage Services, Muhammed Abdu, described the loan recovery task as an epoch-making exercise essential for the growth and future of the bank. Abdu reassured the FMBN management of the team’s dedication to working collaboratively and efficiently.
The establishment of these specialised loan recovery teams marks a significant milestone in FMBN’s efforts to enhance financial stability and operational efficiency, paving the way for the continued support of affordable housing initiatives across Nigeria.
