25 February 2014

Nigeria: CBN Okays Seven Out of 89 Firms As Primary Mortgage Banks

The Central Bank of Nigeria (CBN) has approved the applications of seven firms to operate as primary mortgage banks (PMBs) in the country.

According to CBN sources, the firms are SunTrust Savings & Loans, Mayfresh, Jubilee Life, Platinum Savings & Loans , Trust Bond, Kogi State Savings & Loans and Abbey Building Society.

The CBN has been carrying on the consolidation of the mortgage banks in the country. Out of the 89 firms that applied for the consolidation exercise, only the seven firms were able to obtain the national licence that allows them to operate in all the states while 33 other firms will only operate in one state of the country. While the 33 firms complied with the capitalisation requirement of N2.5 billion, the seven firms were able to meet the minimum requirement of N5billion It is also worthy of note that the latest action of the CBN has been gazetted accordingly. Also, the new policy means that the popular Aso Savings and Loans will now be restricted to the FCT or any state in the country for its operations.

It would be recalled that the CBN in 2010 asked the 89 primary mortgage institutions (PMIs) in the country to recapitalize to N5 billion, an announcement that caused ripples in the industry. The apex bank fixed April 2013 as deadline for compliance but apparently extended the deadline until the gazette of the new approvals recently.

The apex bank explained at the time that the idea of state PMIs was to promote the spread of mortgage firms across the six geopolitical zones to further embed the objective of financial inclusion and that the national PMBs will provide options for operators to remain in business at different authorization levels.

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