ABSTRACT
This is a research on Mortgage Banking in Nigerian Economic
Development Programmes.
The research sorted to know for the existence of mortgage
banking has been fact by the people and to the extent their objectives has been
achieved.
In carrying out this research the researches made us of oral
interested and questionnaire and the finding infere that mortgage bank it
towards the economic development has been felt through many areas of their
promotional activities such as loan advancement home and house renovators and
refurbishment etc.
Therefore, it was this base that mortgage banking has been
appreciated by the greatly achieved.
CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
FEDERAL MORTGAGE BANK
OF NIGERIA
(FMB)
Housing is one of the
Importance factors that determine Urban forms and constitutes the single most
serious problem facing large cities in Nigeria today.
In the 1950s and 1960s, the need to finance housing in Nigeria
remained so small mainly because of low urbanization level. The byoyancy of the Nigeria economy in the 1970s and the uneven
spatial distribution of industrial development accelerated the rate of
urbanization in Nigeria. The heretherto uncontrolled and unplanned
urbanization resulted in housing shortages in qualitative and quantitative
forms. There existed today a yawning gap between the demand and supply of decent
accommodation. The consequence of excess
demand over supply, was high rent, and the growth of informal rationing system
which discriminated against the poor to the extent that over half of the urban
population in Nigeria live in slump against this background and considering the
fact that housing provides the physical frame work in which man’s human,
social, economic and cultural resources are realized, entrenched and
integrated, it becomes obvious that adequate housing deserved great attention.
In realization of the importance attached to housing the
federal government of Nigeria
established the Federal Mortgage Bank of Nigeria
in the year 1977 as a successor to Nigeria
Building society
established in the year 1956.
1.2 STATEMENT OF PROBLEM
Mortgage Banking was
established by the Federal Government of Nigeria to assist in financing housing
prograts as a means of checking the magnetude housing problems facing the Urban
cities. But this aspiration has not been
fully realized due to pressing problems facing the mortgage banking.
In Nigeria,
in the disbursement of loan to individual developes, some of those
problems includes;
a.
Now repayment of housing loans given out to individual, this situation
of non repayment makes it highly difficult for the mortgage banks to still
extend such housing loans to other customers who has a need the loan, for
housing development.
b.
The ability of the individuals to declare his or her actual income is
another major problem facing the bank.
This situation makes imperstively difficult for mortgage bank to
disburse enough loan, enough to complete the individual’s housing project. In a situation of such kind, the mortage bank
will require the customer to bring the house to a point before applying to the
bank to come in with a loan that will be enough to complete the building
project.
c.
The inability of the individual to obtain title documents like this
certificate of occupancy (CFO) for urban areas create a problem to the mortgage
bank in disbursing loans.
1.3 INTRODUCTION
The Nigeria building
society was the first mortage institution to be established in 1956 to finance
house building not necessarily home ownership it was financed by substantial
equity by the colonial later common wealth development corporation (CDC) and
the federal and regional government in the regions, housing corporation were
established, partly to build and save or let estates.
Housing and impact
mortgage finance represents the third area where special intervention is made
necessary by the sheer magnitude of the problems.
The Federal mortgage
bank of Nigeria (FMBN) was established in 1977 as a fully owned federal
government housing development finance agency under the federal mortgage bank
Act No 7 of 1977. This step followed the dissolution of the Nigeria
building bank society (NBS) whose assets and liabilities were taken over by the
FMBN. The Nigeria
building society was itself incorporated in December 1956 with a capital of
N3.25m and jointly owned by the common wealth Development corporation (CDC),
the Federal government of Nigeria
and the Eastern Nigerian government in the proportion of 60 percents, 31
percent and 9 percent respectively. The
federal military government however tool over the (CDC) share of the capital in
1972. the authorized share capital at
the time federal mortgage bank of Nigeria (FMBN) 1987 diary.
The firm of Bereuschool
move Bosboom (Management consultant) was contracted by the federal government
to supervise the take off of the new bank for a 3years period of from 1977.
With the exit of the
Dutch management consultants in July 1980, the management operations of the
bank became wholly independous in the same time. There was also a charge in the authorized
share capital and ownership structure of the bank. The authorized share capital increased to
N150 million jointly subscribed by the federal government and the central bank
of Nigeria
in the proportion of 60 percent to 40 percent respectively. The federal government appoints the chairman
and members of the board of directors.
By 1931, the bank has established branches in all the state
capitals. Underscoring its national
outlook, since then additional forty-three (43) home savings center had been
established in major in outside the state capitals. This is decidedly to expand it sprend of
service delivery as we as to widen its savings mobilization buse.
The 19 branches offices
were organized into 4 zones otherwise known as area offices.
Each branch office is
self-accounting and is empowered to approve individual mortgage loans up to
N65,000.00 which has to be rectified by the head offices for the time being,
the low lending rate and longer matarity spread of FMBN loans have led to an
influx of mortage applicants from allux over the federation since 1977 to date.
The mortgage assets of
the bank have been increasing steadily over the years. As at 30th June 1977, the next
mortgage assets of the bank was N75 million but as at 31st December
1982. The next assets of the bank stood
at N326 million between 1977 and May 1986, a total loan disbursement of N365,
560, 130 was made to 12,000 mortgage (federal motgage bank of Nigeria diary of
1987) in 1986, a wholesome loan type was introduced to serve the loan
requirement of private developers, state housing corporation and big commercial
ventures.
1.4 PURPOSE OF THE STUDY
There may be several
purposes opened to any one carrying out a research of this nature but my own
purposes are narrowed down as follows.
a.
To examine the extent to which mortgage bank have conformed to the federal
government and central bank stipulated credit guideline to operate of nature
housing fund scheme.
b.
To evaluate the reason why despite federal government finding, they fed
relevant to extend credit to operators of national housing fund.
c.
To find out the purpose of mortgage creation.
d.
To find out why the guidelines are not workable within the context of
the present mortgage structure without jeopardizing their business interest.
e.
To identify the problem of mortgage bank as regards the disbursement of
loans to the national housing fund and actual causes of loan disbursement
delay.
f.
To investigate as far as mortgage banking is concerned and its resultant
effect to the people and the overall economy.
g.
To also examine other area of the guidelines that constitute problem.
1.5 SIGNIFICANE OF THE
STUDY
The research is greatly
concerned over the relevance of the study to the entire society and more
important to the operators of the National Housing fund scheme the study was
undertaken to find out how and to what extent then mortgage bank loan
disbursement polices had helped the operators of the National Housing scheme to
realize the general aspiration of the government on house for all by the year
2000.
I have the believe that
if the findings of this work will be followed, it will afford the contributors
and the general public the opportunity to start investing in the mortgage
development by floating mortgage institutions.
1.6 SCOPE OF THE STUDY
Considering the large
geographical nature of Nigeria
and scattered federal and state ministries, this study will be carried out
within the geographical boundries of Aba, Abia State
and Enugu, Enugu
State of Nigeria. The potential respondent will be from workers
of federal and state ministries and staffs of selected mortgage institutions.
1.7 LIMITATION OF THE STUDY
There were a lot of
setback that intended to hinder the realization of the objective of this
study. First is the none availability of
data on this subject, most of the data for this work could only be obtained
from the federal mortgage institution which in most of times they feel
reluctant in complying with research innervate other limitations include none
return of the questionnaire in time, the other constant is time factor,
combining lectures with the research work.
1.8 DEFINITION OF THE TERMS
BANK: Bank has been defined by many author and
educated elites. But to their purpose of
this project, bank may be defined as any person or corporation that provides
the minimum banking services and which is licensed as a bank by the federal
government of Nigeria
as a banking institution.
MORTGAGE: A legal agreement by which a bank or similar
organization lends one money to buy or to build a house and the money can be
paid over a particular number of years.
MORTGAGEE: This is a person or organization that lends
money to people to build or buy a house.
MORTGAGOR: This is a person or organization who borrows
money from a bank or similar organization to build or buy a house.
BANK LOAN: This may be defined as the financial facility
granted by a bank which is intended to be applied for financing of a specific
purpose.
DISBURSEMENT: This means to pay money from a large amount
that has been collected for a purposes.
REFERENCES
Orji John (1998) Element of
banker in Nigeria, Enugu Rock Communication Ltd
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