Project Abstract

Mortgage banking in Nigeria has undergone significant development over the years, marked by achievements and persistent challenges. This study provides an in-depth analysis of the historical evolution of mortgage banking in Nigeria, focusing on its development, achievements, and problems. The research draws on a combination of primary and secondary sources to trace the trajectory of mortgage banking in the country. The historical development of mortgage banking in Nigeria can be traced back to the establishment of the Federal Mortgage Bank of Nigeria (FMBN) in 1956. The FMBN was created to promote homeownership among Nigerians by providing affordable mortgage financing. Over the years, the mortgage banking sector has witnessed the emergence of various primary mortgage institutions (PMIs) aimed at increasing access to housing finance for the populace. Despite the achievements recorded in the mortgage banking sector, including the facilitation of homeownership and the deepening of the housing finance market, several challenges persist. One of the key issues facing mortgage banking in Nigeria is the limited access to long-term funds for mortgage financing. This has constrained the ability of mortgage institutions to provide affordable mortgage products to a wider segment of the population. Another significant challenge is the high cost of securing mortgage loans in Nigeria, which is often characterized by double-digit interest rates. The high cost of mortgages has made homeownership unattainable for many Nigerians, particularly low and middle-income earners. Additionally, the lack of proper land titling systems and foreclosure laws has hindered the growth of the mortgage market in Nigeria. Furthermore, the mortgage banking sector in Nigeria is also plagued by issues such as inadequate infrastructure, weak legal and regulatory frameworks, and limited awareness about mortgage products among the populace. These factors have contributed to the slow growth of the mortgage market and limited the impact of mortgage institutions in addressing the housing deficit in the country. In conclusion, while mortgage banking in Nigeria has made significant strides in promoting homeownership and expanding access to housing finance, several challenges continue to impede its growth. Addressing these challenges will require concerted efforts from stakeholders, including the government, regulatory authorities, financial institutions, and the private sector, to create an enabling environment for the sustainable development of the mortgage banking sector in Nigeria.

Project Overview

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.