THE ROLE OF FEDERAL MORTGAGE FINANCE LIMITED IN HOUSING FINANCE WITH THE FEDERAL MORTGAGE FINANCE LIMITED MAIDUGURI AS CASE STUDY
ATTENTION:
BEFORE YOU READ THE
PROJECT WORK, PLEASE READ THE INFORMATION BELOW. THANK YOU!
TO GET THE FULL
PROJECT FOR THE TOPIC BELOW PLEASE CALL:
08068231953,
08168759420
TO GET MORE PROJECT
TOPICS IN YOUR DEPARTMENT, PLEASE VISIT:
THE ROLE OF FEDERAL MORTGAGE FINANCE
LIMITED IN HOUSING FINANCE WITH THE FEDERAL MORTGAGE FINANCE LIMITED MAIDUGURI
AS CASE STUDY
CHAPTER ONE
1.0 INTRODUCTION
Shelter is
universally accepted as a basic and second most essential human need coming next
to food. However, housing in all ramifications is more than mere shelter since
it embraces all the social services and utilities that goes to make a community
or neighbourhood a liveable environment. In Nigeria, the problems of housing
are enormous and complex, and effective solutions to them are yet to be found.
The search however continues. It is in the process of this search that Federal
Mortgage Bank of Nigeria was established under FMBN Decree Number 7 of 1977 as
fully owned Federal Government Housing Development Finance agency. The Nigerian
Building Society (NDS), the forerunner of Federal Mortgage Bank of Nigeria was
established in 1956. Inheriting the assets and liabilities of the Nigerian
Building society, FMBN had commenced operations on July 1st, 1977 as a fully
owned Federal Government agency for housing finance.
For a long
time, the Federal Mortgage Bank of Nigeria remained largely the major provider
of long-term funds in the housing finance sector. The role of the commercial
and Merchant Banks in this sector remained mainly peripheral as they find
lending long-term unprofitable because of the short-term source of their funds.
Specifically, the bank is mandated by Decree No. 7 of 1977 to: -
-
Provide long-term credits to individuals, estate developers and to
mortgage institutions for housing and property development.
- Encourage and
provide the establishment of mortgage institutions as well as supervise and
control their activities; the legal framework is prescribed in Decree No. 53/89
- To mobilize
savings and financial assets
- Assist the
operations of companies engaged in the production of building materials.
- Undertake and
support applied research to improve its activities and the operations of the
sector.
-
Provide technical assistance services on the various aspects of the
sector.
The National
Housing Policy, which was launched by the President of the Federal Republic of
Nigeria in 1991, recognises housing finance as a centrepiece of any credible
housing service. It will be recalled that the National Housing Policy itself
was a subject of National debate from 1984 to 1986. The debate became necessary
to ensure that wide range of opinions was taking into considerations in
fashioning out the policy.
The National
housing Fund was established by Decree No. 3 of 1992 to facilitate the
continuous flow of low-cost funds for long-term investment in housing for
benefits of all Nigerians. The fund is to be managed and administrated by
Federal Mortgage Bank of Nigeria essentially to provide long term housing loan
to individuals through wholesale lending to primary mortgage institutions.
- To any Nigerian
earning an income of =N=3000.00 and above per annum should contribute 2.5% of
his or her basic monthly salary or income to the fund.
- If you are self
employed or you own your own business, whether as trader, Professional or
Businessperson, etc you are expected to contribute to the fund.
In addition,
commercial and merchant banks, Insurance companies and the Federal Government
will also contribute to the fund. All potential contributors to the fund are to
be registered by FMBN. A registration form will be issued by FMBN to an
employee through his/her employer. Each employer is to be similarly registered
to facilitate the deduction and remittance of their contributions. A
participation number will be allocated to you and you should remain the same,
even when you change your place of employment. If you are self-employed, you
are also expected to register. You are to collect a form from any branch of
FMBN. Your employee (if any) should be equally registered. Following your
registration with the funds, your employer is expected to deduct 2.5% from your
salary monthly and remit to FMBN. If you are self-employed, you pay directly to
any of the FMBN. A passbook shall be issued to subscribers to record his
monthly contributions. This passbook must be securely kept as it will be
required for every transaction, and a yearly statement of one’s contribution
shall be sent to him.
The pool of
contribution is to provide housing loans for every Nigerian at relatively low
rate of interest. To borrow from the fund, you must be a contributor. The
housing loan will assist either to buy or build or improve one’s house. Should
contributors want to borrow from the fund, all he needs to do is to apply to
any mortgage institution, where he will receive further information and
assistance. The interest rate applicable at the time you take the loan will
remain fixed until the loan is fully repaid; and the repayment period is over a
period of twenty-five years. Whether the contributor borrows or not from the
fund, his contribution shall attract interest. Refund of contribution shall be
made with the accrued interest to the contributor when he is sixty years old or
retired or can no longer continue in employment due to ill health. It behaves
greatly to understand that the promulgation of the mortgage institutions Decree
of 1989 (Decree 53/89) provides the legal framework guiding the operations of
primary mortgage institutions in Nigeria. The Decree empowers every institution
to:
- Grant loan and
advance to any person for the improvement of or extension of a dwelling house;
- Accept savings
and deposits from the public a87nd to pay interest thereon. By its
establishment, the FMBN is divested of its retail banking and mortgage
operations so that the FMBN could concentrate on its rightful role as the
nations’ apex mortgage lending agency.
The primary
functions of the Federal Mortgage Finance Limited (FMFL) are: -
- To ensure
equitable distribution of mortgage lending activities all over the country.
- To operate as an
efficient and effective mortgage institution which will be a role model for the
private mortgage institutions.
- To dictate the
level and pace of growth of mortgage finance industry and;
-
To minimise avoidable and fraudulent losses, and ensure a timely and
adequate loan recovery performance, in order to create opportunities for
structured expansion in the provision of housing finance.
1.1 AIMS AND
OBJECTIVES OF THE STUDY
The objectives
of this study are to be enumerated below: -
- Review of the
operational financial intermediaries in housing sector especially Federal
Mortgage Finance Limited by taking Maiduguri Branch as a case study.
- Identify the
problems impairing its effective performance, and to re-examine some of the
fundamental principles and objectives of its existence.
- To proffer
solutions in the light of changing sceneries under which it has been compelled
to operate.
- Cast a forward
glance at the future of the institution and sector in which it operates.
1.2 RELEVANCE
OF THE STUDY
The importance
of the study lies on the Federal Government of Nigeria ‘s recognition of the
imperative to divest the old Federal Mortgage Cooperation; and subsequently
established the Federal Mortgage Finance Limited with the corporate mission of
providing responsive and credible housing Finance service that will facilitate
housing delivery to all segments of the Nigerian population. Therefore it is
apposite to mention here that this research work has the following as its
importance: -
- To what extent
the Federal Mortgage Finance Limited ensure equitable distribution of mortgage
lending activities.
- Has the
institution been able to operate as an efficient and effective mortgage
institution that would qualify it be leader of other private primary mortgage
institutions.
- Has it been able
to dictate the level and pace of growth of mortgage finance Industry came to
create opportunities for structure expansion in the provision of housing
finances.
1.3 RESEARCH
METHODOLOGY
In carrying out
this research work, three methods were used to collect data. Data collected
from customers and staffs of Federal Mortgage Finance Limited of Maiduguri
branch, questionnaire was distributed to customers and members of staff of
(FMFL) under the supervision of Branch Mortgage Officer.
The second
method use is personal interview with the Bank Mortgagors officer; Branch
Manager Maiduguri, Branch Solicitor and Branch Estate Surveyor. The third
method is the consultation with “Mortgage News” Quarterly in-house journal of
the Federal Mortgage Finance Limited Volume 1 number 1 and 2, other congenial
texts were consulted to put this research work in good perspective.
AFFILIATE LINKS:
Comments
Post a Comment