MORTGAGE BANKING AND CONTRIBUTIONS TO HOUSING DEVELOPMENT IN NIGERIA
ABSTRACT
This research work is believed is another contribution to Mortgage Banking literature which will be very useful particularly to future researchers on this topic and those already engaged in the banking industry.
The idea behind this project research work entitled Mortgage banking and contribution to Housing Development in Nigeria is inherent from the crucial and very important nature of housing to every right thinking human being.
Professor Abraham Maslow in his “hierarchy of needs”- a most widely accepted description of human needs of the general population classified food, shelter and clothing as the basic needs of every man. Every human being is born landlord; therefore house ownership is a birthright that must be enjoyed bye very man.
The contributions of mortgage banking to the development of housing in Nigeria cannot be overwhelmed. The federal mortgage bank of Nigeria (FMBN) the primary mortgage Institution (PMLs) and other institutional bodies involved in housing delivery have performed numerous functions in the general effort to provide affordable residential houses for the Nigeria population.
However, a remarkable bottleneck facing the Nigerian housing finance sub-sector is the delay by the apex mortgage institution to disburse the National housing fund loan through the primary Mortgage Institution for on-lending mortgagers. To increase the available housing stock, the apex Bank (FMBN) should ensure the constant supply of loans to Nigerians for the purpose of buying building or improvement of residential houses.
The research study therefore is going to show the actual contributions of mortgage banking to housing development in Nigeria. It will equally show the problems faced by the (PMLS) in their housing finance and delivery effort. In trying to state the problems and prospects the researcher utilized both primary and secondary data. The work is structured in time five distinct chapters and written in simple language to enable readers secure a true picture of the information transmitted.
CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND OF THE STUDY
The Nigerian Building Society (N.B.S) was established in 1956 as a federal savings schemes for members of the public. Under the popular savings scheme, the saver was required to deposit in the account on initial sum of N5 (five naira) at opening. The save may subsequently deposit in the account as much as he can from time to time.
The popular saver received interest of four percent on the account and could draw, up to four hundred naira (N400.00) per a month. Larger drawing would required a month notice to the society.
Other special packages were equally handled by the Nigeria Building Society. One important service rendered by the NBS was home purchase mortgage loans.
Under the loan scheme the NBS enabled Nigerians to acquire houses with loans payable over many years up to maximum of twenty (20) years. Applicants who benefited from the loan were expected to immediately bear a small portion of he cost of buildings the house, while repayment at 61/2% interest was spread in such a way that the beneficiary completes the repayment in not later than the age of 55 years. Repayment was usually in monthly installments.
In 1977, the Nigerian Building Society was reconstituted and renamed the Federal Mortgage bank of Nigeria (FMBN). The duty of the federal Mortgage Bank as the sole institution at the federal level for encouraging the flow of funds from various sources to the housing industry through the primary mortgage institutions (PMIS).
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