Nigeria's federal government has finalised plans to raise N17 billion (US$116 million) from the capital market to strengthen the Federal Mortgage Bank of Nigeria’s capital base, The Guardian reports.

The FMBN’s current capital base is a mere N2.5 billion ($17 million) which is impacting negatively on its ability to operate at an optimal level.

Speaking to reporters yesterday, FMBN managing director and chief executive, Abdulsalam Ahmend stated that out of a total of N79 billion ($537 million) approved for disbursement to beneficiaries in January 2009, the bank had granted N42 billion ($286 million) to primary mortgage institutions and estate developers.

He added that there is a need for the recapitalisation of the FMBN in order to meet the massive financing needs of Nigeria's housing sector.