FMBN To Launch Non-Interest Product

The Federal Mortgage Bank of Nigeria (FMBN) has announced plans to introduce a non-interest rent-to-own loan product to boost financial inclusion in home ownership.

Lawal Isa Sauri, the FMBN group head for Corporate Communications, in a statement says that the product was approved by its board of directors so Nigerians can own their homes without involving them in interest-bearing transactions.

Also Read: Despite Forex Shortage, Nigeria’s Imports Increase By N12.11trn

He says “The product’s financing structure is based on the non-interest financing contract of Ijarah Muntahia Bitamleek (lease-to-own). Under this arrangement, FMBN retains ownership of the property until the financing term ends or at any time during the lease period that the beneficiary wishes to purchase the property.

“The product uses a rent-to-own model that allows beneficiaries to move into FMBN and non-FMBN funded homes and conveniently pay towards full ownership using monthly/quarterly or annual rentals.”

The group added that the product was to eliminate the problems faced by eligible Nigerians who wanted to own their homes through the National Housing Fund (NHF) faced because of the interest-based nature of the bank’s existing housing products.

The company further noted that the product would only be available to Nigerians who contributed to NHF, stressing that it covered both FMBN and non-FMBN funded properties with a maximum price of N15 million.