As PenCom, PFAs Disburse 25% of RSA Holders’ Contributions For Mortgage Financing.
The National Pension Commission (PenCom) has announced its intentions to develop regulations that will enable Pension Fund Administrators (PFAs) to engage in securities lending as a viable investment option within the capital market.
This was revealed during a recent workshop jointly organised by the Nigerian Exchange Limited (NGX), the Securities and Exchange Commission, and PenCom. The workshop, themed: ‘Business Facilitation Act 2023 as a catalyst for deepening securities lending in Nigeria,’ provided a platform for this announcement.
Mr. Ibrahim Kangiwa, Head of Investment Supervision at PenCom, highlighted that the existing provisions under section 89 of the Pension Reform Act 2014 had previously restricted PFAs from participating in securities lending. He noted that the recently enacted Business Facilitation Act 2023 now paves the way for the commission to formulate guidelines that support securities lending.
He also emphasised that securities lending had been a consideration for the commission for some time.
“Concurrently, we are reviewing the investment regulations that govern the investment activities of PFAs. Our aim is to enhance and expand these regulations to encompass a wider array of assets, thereby enriching the investment opportunities available to PFAs,” he said.
Meanwhile, Mr. Jude Chiemeka, Divisional Head of Capital Market at the NGX, reiterated the exchange’s dedication to collaborating with all relevant stakeholders to enhance securities lending.
“We are committed to maintaining our collaborative efforts with stakeholders to collectively contribute to the advancement of securities lending transactions.
Ultimately, this contributes to the overarching goal of fostering the development of Nigeria’s and Africa’s capital markets,” Chiemeka affirmed.
Meanwhile, both the PenCom and PFAs have followed through on their promise to initiate the disbursement of 25 percent contributions from Retirement Savings Account (RSA) holders to support mortgage financing.
This commitment has borne fruit, as operators within the industry have announced the approval and allocation of a total of N3.1 billion to various applicants’ accounts by the end of July 2023.
This substantial sum has been allocated to 187 Retirement Savings Account (RSA) holders who are seeking residential mortgage assistance as of July 2023.
The commission has affirmed that these funds have been officially sanctioned and effectively transferred to RSA applicants to facilitate mortgage funding.
During the 2023 media conference organised by the commission in Lagos, Mr. Oguche Aguda, the Chief Executive Officer of the Pension Fund Operators Association of Nigeria (PenOP), which serves as the umbrella organisation for all licensed Pension Fund Administrative firms in Nigeria, disclosed this development.
Mr. Aguda shared insights during his presentation on ‘Improving Accessibility and Service Delivery in RSA Mortgage Financing.’
He delved into the critical realm of mortgage financing, addressing strategies to enhance accessibility and the delivery of services to eligible RSA holders.
He underlined the pressing issue of Nigeria’s housing deficit, which has ballooned from 7 million in 1991 to 28 million in 2023, resulting in overcrowded and outdated housing infrastructure.
Mr. Aguda also highlighted the innovative mortgage policy introduced by PenCom, which empowers RSA holders to acquire their own homes using 25 percent of their pension savings.
This progressive approach contributes to bridging the housing gap while providing valuable opportunities for RSA holders to invest in their future residences.
