PenCom’s Blacklist of Mortgage Banks Sparks Anxiety Among RSA Holders and Industry Stakeholders

The National Pension Commission (PenCom) has shaken Nigeria’s housing finance landscape by blacklisting seven Primary Mortgage Institutions (PMIs) from processing pension-backed mortgages under the Contributory Pension Scheme (CPS). The decision, announced in a letter dated July 31, 2025, and published on PenCom’s website, has sparked concern among workers, mortgage bankers, economists, and labour leaders.

The directive instructed Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) to immediately stop accepting or processing mortgage equity contribution applications linked to the affected institutions:

• Jigawa Savings & Loans Limited
• FHA Mortgage Bank Limited
• Delta Trust Mortgage Bank Limited
• AG Mortgage Bank Limited
• Infinity Trust Mortgage Bank Plc
• First Trust Mortgage Bank Limited
• Mutual Alliance Mortgage Bank Limited

RSA holders who had already submitted applications through these PMIs are now required to resubmit them to eligible mortgage banks. Those who made upfront payments have been told to contact the affected institutions for the “next line of action.”

A Policy Meant to Empower Workers

The CPS mortgage window, launched with optimism, was designed to allow RSA holders access to up to 25% of their pension savings as equity contribution for homeownership. For many Nigerians, it was seen as a lifeline in an economy where the dream of owning a home is often beyond reach.

But the blacklisting underscores long-standing weaknesses in Nigeria’s mortgage sector, where liquidity challenges, governance gaps, and trust deficits remain prevalent.

Industry Voices: Relief and Worry

Mortgage bankers were quick to defend the regulator’s action while warning about ripple effects.

“PenCom’s decision, while painful, is necessary to protect contributors’ funds,” said, Managing Director of a Lagos-based mortgage bank. “But unless the underlying issues of capitalization, compliance, and supervision are addressed, this cycle of blacklisting will continue, eroding confidence in mortgage finance altogether.”

Economists also raised red flags, noting that the decision could discourage contributors from using the pension-backed mortgage program.

“The idea of leveraging pensions for housing was innovative, but the institutional framework wasn’t ready,” argued, housing finance economist at the University of Abuja. “When contributors hear that their chosen mortgage bank has been blacklisted, the perception is that their savings are unsafe, even if PenCom insists otherwise. That perception alone could undermine uptake.”

Labour Leaders Demand Worker Protection

The Nigeria Labour Congress (NLC) voiced strong concerns, warning that contributors must not be made to suffer the consequences of institutional lapses.

“Workers should not be the victims when institutions fail,” said Musa Abdullahi of the NLC. “If a blacklisted bank refuses refunds, will PenCom and the Central Bank intervene? Or will workers be left stranded? This is a fairness issue.”

Labour groups are pressing for a more robust redress mechanism, such as a dedicated guarantee fund or insurance—to ensure contributors are not stranded in the event of future blacklists.

Stakeholders’ Queries

The fallout has generated pressing questions from all sides:

• Bankers: “Is the blacklist temporary or permanent?”
• Economists: “Will this weaken trust in the CPS mortgage program?”
• Labour: “Who ensures refunds if a PMI defaults?”
• Contributors: “How do we secure our applications and funds quickly?”

Without clear, coordinated responses, stakeholders warn that confusion could deepen.

What RSA Holders Should Do Now

Experts recommend that RSA holders take immediate, practical steps:

1. Check PenCom’s updated list of eligible mortgage banks before proceeding.
2. Resubmit applications quickly to approved PMIs to avoid project delays.
3. Engage directly with blacklisted banks for refunds or guidance, keeping all documentation.
4. Contact your PFA for guidance on approved alternatives.
5. Seek union or legal help if refunds are delayed.
6. Stay updated on PenCom notices to avoid misinformation.

The Road Ahead

PenCom’s decision highlights its resolve to safeguard pension funds, but it also exposes deep cracks in Nigeria’s housing finance system. For the pension-backed mortgage scheme to succeed, analysts say three things must happen: stricter oversight of PMIs, creation of safety nets for RSA holders, and tighter collaboration between regulators and industry players.

For now, RSA holders are left balancing hope with caution. The blacklist is more than a compliance directive—it is a reminder that Nigeria’s journey toward affordable housing and secure pensions depends on building institutions that workers can truly trust.