The Nigeria Police Mortgage Bank (NPMB) was established in 2012 under the leadership of IGP Mohammed Dikko Abubakar (retd.) to satisfy the housing need of police officers. In this interview with CHIZOBA OGBECHE the Managing Director, NPMB, Abubakar Suleiman, speaks on how the bank has fared.
How did the Nigeria Police Mortgage Bank come into being?
Nigeria Police Mortgage Bank came into being following the concerns raised by the police management about the challenges police officers were encountering in accessing the National Housing Fund.
Over the years, many policemen retired from service without homes to spend their post retirement lives.
The Nigerian Police Force has over 300,000 personnel and they are the largest single contributor to the National Housing Fund but accessing the funds had to be done through a Primary Mortgage Institution (PMI) which was also problematic because of the peculiar nature of their job. It is the same peculiarity that made the government to give the Nigeria Police its pension administrator, Nigeria Police Force Pensions Limited.
So, given their large number, the Police management came to conclusion that the Force needed to have its own primary mortgage bank. At that time the Central Bank of Nigeria (CBN) had suspended issuance of licenses, so the Force could only get its own primary mortgage bank through acquisition of an existing mortgage institution.
This was what led to the acquisition of Fokas Savings and Loans Limited, however, before the commencement of business, the CBN came with a new policy of recapitalisation of all primary mortgage institutions putting their minimum share capital at N2.5 billion for those operating state licence and minimum of N5 billion for those operating national licence.
Now, we had to go back to the drawing board on how to we raise this fund. Initially, the police cooperative had purchased the entire share capital which was just N25 million. So, you can see the gap, N25 million to N2.5 billion. That was about 100 times increment.
So, we said since it is for every policeman and for everybody to have a sense of ownership, each police officer should have at least 10,000 shares in the bank at N2 each which was a premium at N1.10k premium, which people paid N11,000 but some people took more, some took N500,000; some N2 million, some N6 million, depending on their capacity.
That was the right thing to do at the time. The Nigeria Police acquired the bank around October 2012 so refurbishing its recapitalisation and other forms took about two years. This is because after recapitalisation, we also had to start building technology, deploy the IT, and decide how to serve our customers. The bank officially opened for business in 2015.
So, how has the experience been?
Over the years, I will say the bank has done substantially Okay. Of course, in the course of starting, there were a lot of operational deficiencies that took a heavy toll on the bank. There were issues with IT, moving to the headquarters of the bank from Abeokuta, Ogun state to Abuja, staffing the bank, and then deploying the right resources to run the bank. It took enormous amount of the funding and it was afterwards that we started the business.
How would you rate the bank’s performance specifically as it concerns housing for officers and men?
In the area of housing, I can say that the bank has done reasonably well. This is in the sense that the bank has part-financed construction of houses in some locations for police officers including Lagos, Abuja, Yola, Katsina, Benin and Enugu.
So far 1,165 police officers have contributed to the National Housing Fund to the tune of N2.934 billion, Mortgage Equity Financing of 378, which is a total of N834,887,797.70k; Housing Renovation Loan is 445 in numbers to the tune of 314,730,000.00; Home Ownership Loan 25 people with the sum of N71,075,459.89k and the Mortgage Perfection Loan with N9.9 million, so find a total of about N4.165 billion.
That’s the total loans that have been given the police and we’re still working on more. Our goal is that by next year this figure would be doubled. We have passed the stability stage, we now in the growth stage.
So, were the police officers who are shareholders issued share certificates?
Yes, that’s another issue. Every police officer was asked to fill a share application form, but you know because of the nature of their job, some are on the border, some are in other terrains without network, not all of them were able to fill the form but almost all those who filled the forms their certificates printed. Out of the 164,384 share certificates that were printed 124,893 have been collected leaving 39,491 certificates to be collected.
There are about 160,616 whose share certificates have not been printed. We have an office here which people have been coming to collect their certificates and we have dedicated lines 092918007, 09057333776, so that people can always call to make inquiry. The forms are available on our website where they can always download, fill the forms and send to us, either via our email or website www.nigeriapolicemortgagebank.com. So, it is an ongoing thing that indeed we are surmounting it.
So, how much have you paid in dividends?
Like I mentioned earlier due to the major pre-operational expenses the bank had accumulated losses but we have turned around these losses. By requirements of the laws or rules you cannot pay dividends unless you write off all the accumulated losses.
By the first quarter of next year, we will write off all the accumulated or negative account losses and we hope by December, end of the year 2023, we will be able to declare dividends to all existing shareholders. This is our promise by 2023, December next financial year.
Are officers recruited after the bank started shareholders too?
No, the new officers are not shareholders. It’s only officers who were in service at the point of the bank’s recapitalisation.
Once we start declaring dividends it would be clear to everybody what they are investing in and they would willingly subscribe, we could even get oversubscribed because people can see clearly that there is growth and there is benefit. They will invest not because somebody said come and invest, but because they believe it is a good investment. So by 2024 we will be Okay, and if you’re interested the door will be open.
Do you have issues with any segment of the police entity?
There are two things involved. I will say we don’t have direct challenge but with the investors like you know if people invest money for a long time and nothing is coming back to them, it is only natural for people to feel worried or aggrieved.
Information flow with the police presents some challenges because some officers have complained about not receiving dividends which we explained and others about not receiving their share certificate and we tell them how to go about getting it.
These are the major challenges that we have, or the major complaints that the investors may have with us, and we are working seriously to get them resolved.
Is the police management involved in running of the bank?
No, the police management are not involved in the running of the bank. Indeed the police management must be commended for allowing the bank operates as a cooperate entity. There’s a board, the bank management reports to the board, the board reports to the police management.
I can put it here, this is my fifth year and not once, did any police management send paper and say give this person job or do this thing, or whatever. If somebody comes to do business with us they present their business proposals, we look at it and if it is viable we do. If it is not, we don’t do it.
I’ve never had a case of any interference, at least since I came and I came here in 2018. We don’t have that challenge.
Looking at the benefit of hindsight, we’ll say it was What the Why or it was what the establishment of this police mortgage.
Yes, specifically, specifically focus on the police because of the size. It was what the why when compared with all the
Yes, it was worthwhile establishing this Mortgage Bank in the sense that we know the system and we understand our own system and their peculiarities. So can represent the interest of the officers effectively b y working out the challenges.
Number two, because we know we’re solely for the police. We have to pay attention to the police and continue pushing so that based on their salary we find out the sort of mortgages that they will want unlike other institutions like CBN, FIRS and others in the oil and gas who will collect bigger loans or get higher interest. Also, even the houses they will buy they can afford most of these houses. In the police, there is this challenge, which is generally in the public sector, because if you look at it which level determines the house you can afford. For example, how many people can afford N20,000 reduction per month and it is for like 20 years every month. How much would that give you? It’s not more than N7 to N8 million. It seems so big in terms of one’s salary and that is one of the challenges the police had, because others have people that are bigger so why pay attention here? So, we have to protect the interest of our primary customers. We’re in partnership with Nigeria Police Cooperative that has a number of houses built, which we give to policemen and get mortgages for them. And you the corporate wants to get this money we’ll give you about someone. So we’ve created liquidity. We got the money from Federal Mortgage Bank, the policeman has got the house, and he will pay for over 20 to 30 years. Nobody will have the patience to be dealing with it from outside because they will be looking at a higher figure.