Loan Recovery: FMBN Goes After Debtors, Set Up Task Teams

The Federal Mortgage Bank of Nigeria (FMBN) has shown apprehension regarding the lack of mortgage repayments by subscribers. 

In response, the bank has established seven specialized loan recovery task teams to retrieve all delinquent loans nationwide. 

The Chief Executive Officer and Managing Director of FMBN, Shehu Osidi,  emphasized that the initiative is also intended to minimize non-performing loans. 

He stated that the action became necessary to protect the bank's financial interests and maintain the longevity of its lending activities.

He mentioned that FMBN had been instrumental in offering cost-effective housing finance to Nigerians over the years, thus making a substantial contribution to the realization of the national housing agenda and the encouragement of property ownership.

Osidi said: "Nevertheless, the continuation of these initiatives depends on our capacity to efficiently retrieve loans and reinvest them in upcoming projects; regrettably, the bank has not excelled in this area.

"The retrieval of loans is a crucial aspect of our financial management plan. This is necessary to guarantee the availability of funds for distribution to new recipients while upholding the credibility of our lending activities.

“Despite the successes we have recorded in our home delivery efforts, we must acknowledge the enormous challenges we face with our non-performing loans.”

According to Osidi, some of the NPLs are due to infractions from external parties and factors.

He stated that going forward, staff would be held accountable for the outcome of credit decisions in which they have played critical roles.

He said that 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."

Osidi said 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 stated that the team would examine the segmentation of the loans and the likelihood of recovery, create a comprehensive recovery strategy, involve relevant stakeholders, and utilize both traditional and informal yet acceptable methods to conduct the recoveries. 

He emphasized that if the team decides to involve law enforcement or the court, such action should only be taken with the approval of the executive management.

Osidi indicated that the team will be expected to provide regular updates and progress reports to the executive management and monitor the progress of debt recovery efforts. 

He also mentioned that they would implement measures to prevent non-performing loans, including developing risk mitigation strategies and improving the credit assessment process, among other actions.

The FMBN boss affirmed that to ensure effective implementation, the teams were divided based on geographical zones, with each team responsible for handling delinquent loans within its jurisdiction. 

In his comments, Chinenye Anosike, the Executive Director of Business Development and Portfolio Management, praised the task team members for their careful selection and encouraged them to fulfill their mandate. 

He urged the teams to not just talk about loan recovery but to put in hard work and utilize their expertise to achieve positive outcomes within the given timeframe. 

Muhammed Abdu, the Executive Director of Loans and Mortgage Services, described the loan recovery task as a significant responsibility and a transformative effort to reshape the bank's growth, development, and future. 

Abdu reassured FMBN management of the team's commitment to work together collaboratively, selflessly, objectively, and with a sense of urgency and passion.
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