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The Development perspective of Akwa Savings and Loans Limited

The Development perspective of Akwa Savings and Loans Limited

By Josephine Ekpa

Mortgage Banking was established by the Federal Government of Nigeria to assist in financing housing programmes as a means of checking the magnitude of housing problems facing the Urban cities. But this aspiration has not been fully realized due to pressing problems facing the mortgage institutions. Replaced the Nigeria building society (NBS), which was the first mortgage institution that was established in 1956 to finance house building not necessarily home ownership it was financed by substantial equity by the colonial later Commonwealth Development Corporation (CDC) and the federal and regional government in the regions, housing corporation were established, partly to build and save or let estates.

Since then, the problems of housing development in Nigeria, no matter how grand and viable in scope and content will remain a day dream, despite various pronouncements, regulations and deregulations and all financial implementation policies of this country, the issue of accessing sufficient funds for an effective housing delivery system remains perceptually unreserved. Given that housing is one of the basic necessities of life; basic to any development and one of the important factors that determine Urban settlement, however forms and constitutes the single most serious problem facing large cities in Nigeria today.

         In the 1950s and 1960s, the need to finance housing in Nigeria remained very small mainly because of low urbanization level. In realization of the importance attached to housing the federal government of Nigeria established the Federal Mortgage Bank of Nigeria in 1977 as a successor to Nigeria Building society established in 1956. Mortgages are used by individuals and businesses to make large real estate purchases without paying the entire value of the purchase up front. A mortgage is a debt instrument, secured by the collateral of specified real estate property that the borrower is obliged to pay back with a predetermined set of payments.

The Federal mortgage bank of Nigeria (FMBN) was established to operate as a vehicle for increasing the mobilization of long-term funds, lending volume and expansion of mortgage lending services to all segments of the Nigerian population. As a fully owned federal government housing development finance agency under the federal mortgage bank Act No 7 of 1977, this step followed the dissolution of the Nigeria building bank society (NBS) whose assets and liabilities were taken over by the FMBN.

In Nigeria, mortgage financing has been a major area of concern, identified as one of the most formidable constraints in the housing sector. The recognition of the critical importance of finance in housing delivery led to the establishment of the Nigerian Mortgage Refinance Company in June 2013. Policies of various arms of government in Nigeria had been unstable over the years due to frequent changes and instability in the nation’s system. This instability can be attributed to the government’s failure to develop a viable and sustained housing finance system either because of lack of expertise, up to date and knowledgeable industry leaders especially in the policy making arms, lack of funding for relevant institutional agencies/department, political and selfish gains.

The challenge of affordability has been attributed to high costs of land and building materials. For the majority of the Nigerian populace that falls below the middle class, this high cost of building has made the dream of owning their homes far-fetched. Some challenges associated with housing provision for the low and medium income earners include credit risk, liquidity risk, and cash flow risk. The mortgage banks face the challenges of; Low-interest rates on National Housing Fund; Macroeconomic environment; Non-vibrancy of some Primary Mortgage Institutions (PMIs); cumbersome legal regulatory framework for land acquisition.

To effectively tackle the housing deficit in Nigeria, there is a need for an integrated approach that encompasses all elements and processes required in housing production, beginning from land acquisition up to building acquisition. The nation needs policy makers that are housing specialists who have the requisite knowledge and competence and not just political figures who do not understand the role of housing in an economy. The primary impediment to the development of a virile mortgage banking sector is the Land Use Act (LUA) 1978 because it affects every aspect that relates to the acquisition of affordable housing ranging from basic human rights to mortgage lending. The successful amendment of this land use act will effect certain changes that would ultimately encourage processes that would facilitate the delivery of affordable housing in the country.

In Akwa Ibom State, the Akwa Savings And Loans Limited, which is a Mortgage Bank wholly owned by the Government of Akwa Ibom State was established and incorporated on January 25, 1993 under the name Akwa Mortgage Finance Limited with fully paid up capital of N20 million. In 1995, the name was later changed to, and incorporated as, Akwa Savings and Loans Limited in accordance with Mortgage Institution Decree 53 of 1989 to carry out mortgage banking business with a mandate of providing affordable houses to workers in the public and private sectors. This dream has been fully fulfilled especially since the assumption of office by the present management led by a seasoned Banker, administrator and entrepreneur, the Managing Director and Chief Executive Officer, Mr. Ebong Bassey who has already taken the organization to an enviable height through effective leadership and managerial prowess.

Akwa Savings And Loans Limited, has its corporate headquarters at Plot 1, Block 1, Federal Housing Estate, Abak Road in Uyo where it oversees other branches in their day to day activities. It is true that aside managing plots in Aka Itiam Metropolitan and Afaha/Effiat Offot Estates and rendering services on a-day-to-day basis as well as carrying out their constitutional mandate, management of the state mortgage institution, Akwa Savings And Loans Limited has also embarked on aggressive Corporate Social Responsibility (CSR) to its immediate communities.

The effort of the management of the state-owned mortgage institution was commended when the Managing Director and Chief Executive Officer of the bank. Mr. Ebong Bassey swiftly detailed officers of the institution to verify and report to management the extent of damage caused by flood at Ntiedo Crescent occasioned by heavy down pour  as was reporter by our medium recently and this has been successfully carried out. While the management promised to present the matter to the state government for immediate action, residents of this community has been assured of a new lease of life and intervention.

Meanwhile, the Managing Director and Chief Executive Officer of the bank, Mr. Ebong Bassey and the Company Secretary/legal Adviser, Barr. Abasiama Idiong in their different reactions commended the state Chief Executive, Mr. Udom Emmanuel for carrying out massive infrastructural and development activities across the three senatorial districts of the state. They said that the spate of work done by the present administration, if maintained will make the state ranked among other states in the African continent. They observed that the quality of work done in all sectors of the economy are second to none and will stand the test of time. They called on the governor not to be distracted by the current political waves but continue to be focused on the development of the state.

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