Chinese Investors Offer $4 Billion Loan to Federal Mortgage Bank of Nigeria

Chinese investors have offered the Federal Mortgage Bank of Nigeria (FMBN) $4 billion to improve the country’s inadequate housing infrastructure, Mr. Gimba Yau Kumo, FMBN’s Managing Director said on Wednesday on the sideline of the World Economic Forum Africa that ends in Abuja today.

According to him, a final agreement on the deal would be made at a meeting between the bank’s management team and relevant government officials.  Kumo stated, “The Chinese have made an offer to us to lend us about $4 billion dollars to the Federal Mortgage bank of Nigeria.”   He added however that the investors gave the bank a condition; a Sovereign Guarantee (government’s guarantee that an obligation will be satisfied if the primary obligor defaults) from the Federal Government.

Kumo noted that there was nothing strange in the investor’s requirement as it cuts across other property industries where the Chinese have investments, citing Singapore as an example. The management of the mortgage bank has therefore entered into talks with the Minister of Finance, Ngozi Okonjo-Iweala in order to get the government to accept the investors’ terms.

The MD said he was optimistic an agreement would be reached as he said the deal was a huge opportunity for improving infrastructure in Nigeria’s housing industry.  A World Bank report in 2013 said Nigeria would need N59.5 trillion to address its 17 million housing deficit.

The FMBN has however been able to deliver only 39,425 housing units, 12,420 (31.5 percent) of which were in the last 41 months.  The loan from Chinese investors is expected to increase the mortgage bank’s capacity as it continues addressing the country’s housing deficit.

Source: Ventures Africa