CBN, PenCom Work Out Mortgage Financing For Workers Under Contributory Pension Scheme

Workers under Contributory Pension Scheme (CPS) may soon have access of investing their 25 contributions in mortgage financing.

The modalities for this are being worked out by the Central Bank of Nigeria (CBN) and the National Pension Commission (PenCom).

Also, the Creative Industry Initiative and Export Initiative have entered implementation stages and that operators in the sector should begin to submit their proposals for funding to their various banks.

These formed the high point of deliberations of the Bankers Committee meeting held at the Corporate headquarters of the CBN on Thursday in Abuja.

The Managing Directors of FBN Quest Merchant Bank, Mr. Kayode Akinkugbe; Ecobank, Mr. Patric Akinruntan; FSDH Merchant Bank; Mrs. Ambah Hamda; City Bank, Mr. Akin Daodu; CBN director of Banking Supervision, Mr. Ahmed Abdulahi and CBN Director, Corporate Communications, Mr. Isaac Okorafor gave insight into the deliberations of the committee.

They explained that when finalized, the 25 percent pension contribution will form the contribution of workers to building their houses to which they can then obtain the remaining 75 percent as loans from banks.

According to Hamba, “the 25 percent of RSA being made available to the holders as equity contribution for mortgages is a work in progress.

“CBN and Bankers’ Committee would work with PenCom to make this a reality.

“Once it becomes a reality, an RSA holder will then be in a position to walk up to his pension fund administrator and ask to access 25 percent saved up in his name and would like to borrow money to build a house.

“With such approval, you will then approach your banker. It would make the bank very willing because you will then be coming with a sizeable sum of money where you would also contribute to the project”, she said.

In respect of the Creative Industry Fund, Akinruntan explained that “it is now at execution stage and that all banks are participating in the creative initiative.

“Every person or business that is into any of the coverage areas is encouraged to put together their proposal, demonstrate the viability and approach their bank.

“The central bank will have a central collation point where all the request that comes through any bank is forwarded so that we have a way of knowing the impact we have made in creating employment, stimulating the economy.

“The same applies to the export support fund be it in cashew nut, be it in sesame seeds and all the various rich exports that we are able to mobilise because of the impact for employment ability in the economy.

“We are now in execution phase. There is a learning for both customers and banks but it is an area where we have absolute commitment.

“The interest rates for these initiatives is nine percent inclusive of all charges.

Also, Abdulahi said consumer financing “Is an important asset class.

“Banks are looking for more innovative ways to create credit. At the moment, it is much structured around salaried staff but we need to look for ways of extending it to others like using the Collateral Registry. Assets are more easily used as collaterals.

“The whole intention is to ultimately drive much more financing which will have impact on other sectors of the economy along the value chain because the manufacturer is able to sell more product.”