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Wednesday, 03 April 2013 00:00
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NDIC begins liquidation of failed mortgage institutions

Alhaji Umaru IbrahimThe Nigeria Deposit Insurance Corporation (NDIC), said it has began the process  liquidated the assets of seven Primary Mortgage Institutions (PMI) considered not viable.

Managing Director of the Corporation, Alhaji Umaru Ibrahim, disclosed this at a meeting with the board and management staff of the Federal Mortgage Bank of Nigeria (FMBN), led by Mr Bisi Ogunjobi in Abuja.

According to him, though the liquidation directive by the Central Bank of Nigeria (CBN) was on 25 PMIs, the corporation could only identify seven at the moment.
He, however, did not list the companies liquidated.

In 2012, the CBN directed the NDIC to liquidate the assets of 25 PMIs considered not viable.

The managing director said the corporation had begun the liquidation process of those it could trace.

He stressed that the corporation had to do a lot of search at the Corporate Affairs Commission (CAC) to determine the ownership structure of some “invisible PMIs’’.
“A couple of months ago, the CBN had cause to revoke the licences of 25 PMIs and naturally asked us to liquidate whatever remains of them,” he said. “Interestingly, we were able to trace only seven of them.

The rest I believe were paper institutions; we are carrying out a lot of search at the CAC to determine the management, board, shareholders and other details of those invisible institutions. Having identified the seven of them, we are in the process of commencing liquidation such that the established depositors would be compensated. That, again, has proved to be a very difficult exercise because most of them were not rendering returns to the CBN or NIDC; therefore, determining the deposit liabilities of those identified institutions is a Herculean task.”

As part of efforts to reposition the sector, Ibrahim stated that the corporation had mapped out a framework for possible granting of financial assistance to deserving PMIs and micro-finance banks.

Chairman of the Board of FMBN, Ogunjobi, underscored the significance of inter-agencies collaboration in addressing the myriad of challenges confronting the Nigerian mortgage sector.

Ogunjobi highlighted some of the programmes to include refocusing and re-structuring of banks’ policies and mobilising funds to meet clients’ needs.

He also stated that the new management of the foremost mortgage institution had been working round-the-clock to enable it to deliver on its mandates.

According to him, FMBN made a profit before tax of N300 million and had N3.6 billion debt compared to the past years when the bank’s debt usually stood at between N4 billion and N8 billion.

As part of the structuring process, the board chairman also noted that the bank had evolved a process of automation system which enabled contributors to the National Housing Fund (NHF) to access their account online.

“The automation that has taken place in the bank, very few other institutions have it,” he said. “Today, each contributor to the NHF can see his contribution and details of his account online; it was done manually in the past. A lot more progress in this direction will come.”

The Corporation was established in 1988 to protect depositors and guarantee prompt and efficient settlement of insured funds in the event of failure of insured participating institutions.

The FMBN, established in 1956, supplies the mortgage and housing markets with sustainable liquidity for the advancement of home ownership among Nigerians, anchored on mortgage financing.