ABSTRACT
This is a research on mortgage
Banking in Nigeria Historical development Achievement and problems the research
sorted to know for the existence of mortgage banking has been fect by the
people and to the extent their objectives has been achieved.
In carrying out this research
the researcher made us of oral interview and questionnaire and the finding were
that mortgage bank role towards the economic development has been felt through
many areas of their promotional activities such as loan advancement home and
house revaluation and refurbishment e.t.c.
Therefore, it was this base that
the researcher made the conclusion that mortgage banking has been appreciated
by the people and that their major objectives has been greatly achieved.
TABLE OF
CONTENT
Title page
Approval page
Acknowledgment
Dedication
Abstract
Table of content
CHAPTER ONE
1.0
Introduction
1.1 purpose of the
study
1.2
Statement of problem
1.3
Significance of the study
1.4
Scope of the study
1.5
Limitation for the study
1.6
Definition of the terms
CHAPTER TWO
2.0
Literature review
2.1 Functions and
importance of mortgage banking
2.2
Mortgage financial
2.3
2.4
Factor effecting mortgage banking in Nigeria
CHAPTER THREE
3.0
Research design and mythology
3.1 Sources of
data
3.2
Location of data
3.3
Method of investigation
CHAPTER FOUR
4.0
Summary findings
CHAPTER FIVE
5.0
Conclusion
5.1 Recommendation
CHAPTER ONE
1.0 INTRODUCTION
The Nigeria building society was the
mortgage institution to be established in 1956 to finance house building not
necessity home ownership. It was financed by substantial equity by the colonial
later common wealth development corporation (CIX) and the federal and regional
government in the regions housing corporation were established, pretty to build and save or let estates.
Housing and mortgage finance
represents the third area where special intervention is made necessary by the
shear magnitude of the problem.
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 society (NBS) whose assets and liabilities were taken over by the
FMBN. The Nigeria building
society was self 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 Nigeria
government in the proportion of 60 percent, 31 percent and 9 percent respectively. The federal military
government however took over the (CDC) share of the time federal mortgage bank
of Nigeria (FMBN) was established in 1977 was N20 million (FMBN 1987 Dimy) .
The
Dutch first of Bereuschot morel Bosboom (management consultant) was contracted
by the federal government to supervise the take off the new bank for a 3 years
period from 1977.
With the exist of the Dutch
management consultant in July 1980 the management operations of the bank become
wholly indigenous at the same time there
was also a changer in the authorized share capita and ownership structure of
the bank the authorizes share capital increased to N150 million jointly
subscribed by the federal government and the central bank of Nigeria in the
proportion of 60 percent and 40 percent respectively the federal government
appoint the chairman and mebers of the board of Directors By 1931, the bank has
estabilished branches in all the state capitals. Underscoring its national out
look since than additional forty-three (43) home savings center had been
established in major area outside the state capitals. This is decidedly to
expand its sprend of service delivery as well as to widen its savings mobilization
base.
The 19 branch offices were
organized into zones otherwise known as area officers.
Each branch office is
self-mortgage loans up empowered to approve individual mortgage loans up to
N65,000.00 which has to be rectified by the head offices for the time being’s
the low lending rate and longers maturity spread of FMBN loans have led to an influx of mortgage
applicant from allux over the federation since 1977 to date.
The mortgage assets of the bank
have been increasing steadily over the years 45 at 30th June 1977,
the next mortgage assets of the bank was N75 million, but as at 31st
December 1982 the Net 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
mortgages (federal mortgage bank of Nigeria Diary of 1987).
In 1980, a wholesome loan type
was introduced to serve the loan requirement of private estate developers,
state Housing Corporation and big commercial ventures.
1.1 PURPOSE OF
THE STUDY
There maybe
several purposes opened to any one carrying out a research of this nature but
my own purpose are narrowed down as follows.
a. To examine
the extent to which mortgage bank have contained to the federal government and
central bank stipulated credit guideline to operators of national housing fund
scheme.
b. To evaluate
the reason why despite federal government funding they feel reluctant to extend
credit to operators of national housing fund.
c. To find out
the purpose of mortgage creation.
d. To find why
the guideline 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 for 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.
1.2 significance
of the study (achievements)
the research
is greatly concerned over the relevance of the study to the entire society and
more importantly tot e operators of the National Housing fund scheme. The study
was undertaken to find how and to what intent the mortgage bank loan
disbursement policies had helped the operators of the nation housing to realize
the general aspirations 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
effort the contributors an the general public the opportunity to start
investing in the mortgage development by floating mortgage institutions.
1.3 SCOPE OF
THE STUDY
Considering
the large geographical nature of Nigeria
and scattered federal and state ministries, the study will be carried out
within the geographical boundaries of Aba, Abia
state and Enugu, Enugu
State of Nigeria the potential respondent
will be from workers of federal and state ministries and staffers of selected
mortgage institutions.
1.4 LIMITATIONS
OF THE STUDY
There were a
lot of setback that intended to hinder the realization of the objective of the
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 bank and some
many mortgage institution which in most of times they feel reluctant in
complying with research interview.
Other
limitations include none return of the questionnaire in time the other
constraint is time factor combining lectures with the research work.
1.5 DEFINITION
OF THE TERMS
Bank: Bank has been defined by many authors and
educated elites. But for the purpose of this project, bank maybe 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 banksing institutions.
Mortgage: A legal agreement by which a bank or
similar organization tends one money to buy or to build a house and the money
can be paid over a particular number of year.
Mortgagee: This is a person or organization that
tends money to people to build or buy house.
Mortgagor: This is a person or organization which
borrows money from a bank or similar organization to build or buy a house.
Bank loan: This maybe defined as a financial faculty
granted by a bank which is intended to by applied for financing of a specific
purpose.
Disbursement: This means to pay money from a large amount
that has been collected for a purpose.
1.6 STATEMENT OF PROBLEM
Mortgage
banking was established by the federal government of Nigeria to assist in financial
housing projects as a means of checking the magnitude 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 developers some of those problems includes:
A. Non 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 loan to
other customer who also need the loan for housing development.
B. The ability
of the individuals to echare his or her actual income is another major problem
facing the bank this situation makes imperatively difficult for mortgage bank
to disburse enough loan, enough to complete the individuals housing project in
a situation of such kind the mortgage bank will require the customer 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 liability
of the individual to obtain title document like the certificate of occupancy
(C.F.O) for urban areas or customary right of occupancy (CR. F.O) for rural
areas create a problem to the mortgage bank disbursing loans.
D. The
centralization of the loan approval at eh head office of the federal mortgage
bank imposes great problems in disbursing loans. Every loan application from
the state area office must be sent to head office. Situation causes a big
problem the head office may have great number of such application, source of
them maybe missing white t will take up to two years before the loan will be
approved.
E. Mortgage interest rate are one on the biggest factor
or problems affecting housing development Nigeria
F. Another
problem facing mortgage banking in Nigeria is the difficulty in
obtaining land in urban areas, because f the high cost in purchasing land in
the urban cities. In respect of this problem, the government is working hard to
address the situation, by sourcing out land and acquiring them from the
communities and there after hard them over to individual for housing projects
as a means of expanding development in the urban cities
G. Lack of funds
to adequately meet the needs of the low income earners in the society. The funds
being provided by the federal government
is not enough to help the bank carry out its functions effectively
because of lack of funds the federal government decided to spirtetion federal
mortgage bank into two, Namely:
a.
Federal mortgage finance
b.
Federal mortgage bank.
This is to ensure
that enough fund is provided for its effectiveness to the government housing development policies.
REFERENCE
J.O Light and Williams: (1970) The financial system
Published by Richard D. Irwin,
Inc.
P.N.C Okigbo: (1981) Nigeria financial system structure
and
growth first edition published
by longman ground.
Robert O. Edimister: (1980) financial institution market
and
management Cory right published
by mcg raw mill, inc.
Journals and Newspapers: (BN Vol. 31 page 53-67 Lagos)
Economic and
financial revised.
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