The Nigeria Deposit Insurance Corporation has expressed its readiness to grant financial assistance to deserving Primary Mortgage Institutions and microfinance banks as part of its efforts at repositioning them for better performance in the financial services system.
A statement by the corporation on Wednesday quoted the Managing Director, NDIC, Mr. Umaru Ibrahim, as saying in Abuja that the corporation was already developing the framework for granting the financial assistance but stressed that stringent conditions would be put in place for deserving MFBs and PMIs to comply with.
“MFBs and PMIs that were deliberately mismanaged by their owners will not be eligible for such accommodation bill,” he said.
He added that details of the novel framework would soon be made known to stakeholders once it was approved by the board of the corporation.
While emphasising the strategic role of mortgage financing in the development of the financial services sector, Ibrahim stated that the Federal Ministry of Finance, Central Bank of Nigeria and the corporation were working on possible measures aimed at reviving the sub-sector towards achieving the transformation agenda of the Federal Government in the area of affordable housing for all.
He pointed out that some of the measures included, amongst others, the CBN’s revised supervisory guidelines for primary mortgage banks, refinancing scheme in the mortgage sector and the proposed review of the Land Use Act.
Umaru announced the commencement of liquidation of seven out of the 25 PMIs, recently closed by the CBN with payment of compensation to their depositors.
He lamented the difficulties being encountered by the corporation in the liquidation process, noting that many of them merely existed as paper institutions.
The NDIC boss said, “The seven were those the corporation could identify after frantic search at the Corporate Affairs Commission to determine the management, board, shareholders and other details of the closed PMIs. It was difficult for the corporation to determine the PMIs’ deposit liabilities due to their failure to render statutory returns to the CBN and pay mandatory premium to the NDIC.”
He said the decision of the corporation’s board to reimburse depositors of the seven identified PMIs was part of its commitment to the protection of depositors of all licensed insured institutions.
He urged the managements of PMIs to see the recent extension of the deadline on the recapitalisation for primary mortgage banks by the CBN from April 31, 2013 to December 2013, as a window of opportunity that must be well utilised.