It was learnt that the police authorities chose to float a mortgage bank to protect the N8bn police remittances in Federal Mortgage Bank of Nigeria from being lost and to put an end to the plight of policemen, who face accommodation crisis while serving and even in retirement.
The police authorities had earlier in the year acquired Fokas Savings and Loans Limited as a vehicle for its housing policy, but the PMI did not have the requisite financial muscle to achieve the plan of the police leadership.
The force had, through the Police Cooperative Multipurpose Society Ltd., acquired 250 million shares from the total equity shares of the PMI amounting to 93 per cent of Fokas Limited and is now making efforts to capitalise it in line with the Central Bank of Nigeria’s guidelines.
An investigation by our correspondent showed that in spite of the N8bn remittances to the Federal Mortgage Bank of Nigeria by police officers under the National Housing Fund, the NPF did not benefit from loan facilities from the bank while other agencies and corporate groups took advantage of the huge contributions from policemen.
It was also gathered that the effort of the police to establish a mortgage bank and benefit from the FMBN was stalled by administrative instability occasioned by frequent change of the Inspector-General of Police by the Federal Government.
But following the decision of the Police Management Team led by the IG, Mohammed Abubakar, to recapitalise Fokas into a full-fledged mortgage bank, the police have been battling to recover their N8bn that was trapped in the FMBN.
“The police did not want to lose their N8bn with the FMBN and that is why they are making strenuous efforts to set up their own mortgage bank, where the money can be put to use,” a source said.
As part of plans to set up a mortgage bank and actualise the police housing programme, the police authorities had directed that N11,000 be deducted in two months’ instalment from the salaries of all policemen.
The money, which was deducted in June and July, 2013, however, generated discontent among the rank and file, many of whom were not well informed about the reason for the deductions.
But a document obtained by Saturday PUNCH indicated that the N11,000 deduction was for each policeman’s subscription for 10,000 shares of Fokas Ltd., which makes every policeman a part-owner of the bank.
“The funds derivable from the capitalisation initiative will enable the recapitalisation of the Police Mortgage Bank on a national mortgage status; on payment of the stipulated capitalisation sum to the CBN, the name Fokas Savings and Loans Limited will be reverted to the Nigeria Police Savings and Loans Limited (Mortgage Bankers),” the source stated.
It was gathered that every policeman, irrespective of rank, would be entitled to a loan of up to N15m at a single digit interest rate not exceeding 8 per cent and repayable over a maximum period of 30 years, to build or purchase a house, renovate a property or purchase a piece of land.
Findings indicated that the force had applied to the CBN and other regulatory agencies to set up a mortgage bank and it was directed to raise the capitalisation sum of N2.5bn for a state branch or N5bn for a national branch in order to acquire the licence.
The force had considered three options, which included sourcing for the required fund and floating an entirely new mortgage bank, acquiring an existing bank and recapitalising it appropriately or incorporating a PMI with the Corporate Affairs Commission.
The police decided to acquire an existing PMI, which it believed, was the most cost effective option.
As part of the conditions for licensing the Nigeria Police Mortgage Bank, the force had opened a branch in Lagos and Abuja in addition to the existing Abeokuta branch inherited from Fokas Ltd.
It had also reconstituted the Board of Directors of Fokas Ltd. to reflect its new ownership while its equity base has been increased from the initial N500m to N3bn.
The Deputy Force Public Relations Officer, Frank Mba, confirmed that the force was shopping for money to capitalise the PMI to a mortgage bank, adding that this was meant to actualise the “housing for all policemen” vision of the IG.
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