CHAPTER ONE

1.0.         INTRODUCTION AND BACKGROUND

The term housing when broadly defined goes beyond building structures that provide shelter for man, it embraces the basic facilities required for convenience both within and around the house such as infrastructural services (Roads, electricity, water supply etc) and development control. Thus housing involved the provision of shelter, services and facilities for the public health and the social well-being of the family and the individuals.  

Whereas poverty on the other hand is the state of being inferior in quality or insufficient in amount (money). It is also the state of one who lacks a certain relative amount of material possession or money.

The federal mortgage bank has contributed widely in removing poverty in Nigeria by giving out loan to citizens and small scale businessmen. Microfinance is created to fill this gap. They also lend small amount of money to small entrepreneurs in order to create a mechanism to alleviate poverty by providing the poor with resources that are available to the wealthy. Banking is not just for provision of capital for the poor, but to also combat poverty at an individual level, it also has a role at institutional level, it seek to create institution that delivers financial service to the citizen who are continuously ignored by the formal banking sector.

From 1973 to 2012, the federal housing authority (FHA) has built only 30,000 housing unit when the present housing need is huge. A gloomy picture of the critical housing condition in the country is apparent, this also reflected in the contribution of the entire housing sector to the nation’s gross domestic product (GDP)

In 1976, the Nigerian building society (NBC) was transformed into the federal mortgage bank of Nigeria (FMBN). The 1989 decree 53 set up the primary mortgage institution to carry out retail mortgage finance while the (FMBN) is to carry out wholesale activities of mortgage financing. The national housing policy was launched in 1991 as promotional (CBN April/June 1995:18)

The national housing policy ushered in the introduction of national housing fund decree No. 3 of 1992 which its management is the activities of the federal mortgage bank of Nigeria.

1.1. OBJECTIVES OF THE STUDY

This is carried out to achieve the following objectives.

1.     To know what housing is all about and how housing and to evaluate the housing problem.

2.     To appraise the activities of the federal mortgage bank of Nigeria in solving/alleviating poverty problem in Nigeria.

3.     To create an in-depth knowledge of poverty and its alternative consequences.

1.2. SIGNIFICANCE OF THE STUDY

  The significance of this study is to know how federal mortgage bank alleviate poverty in Nigeria (FMBN) in provision of houses through the housing authority Abuja.

This study is also relevant to student in tertiary institution of learning, since it will serve as secondary data to those that are intending to carry out research to further on this topic or related field of study for reference purpose.

1.3. RESEARCH QUESTION

The following constitutes the research question of this study.

a.     Does the federal mortgage bank of Nigeria operate towards providing or giving out loan to small scale entrepreneurs?

b.    How does they create fund to the public?

c.      How does the Government encourage the federal mortgage bank of Nigeria in tackling poverty problems?

d.    What are the requirements for granting loan to customers?

1.4. SCOPE AND LIMITATION OF THE STUDY

This topic has to do with the activities of the federal mortgage bank of Nigeria and the Government level of patronage in housing authority. It focuses its attention on poverty alleviation by the federal mortgage bank of Nigeria.

Due to some unavoidable factors such as time factor and lack of resources like writing materials, typing materials and workmanship, the following constitutes the limitation of the project work.

1.     FINANCE PROBLEM: There were various sources of data collection and all the sources are sparsely located and the research of each of every one of them requires finance which at the time of this research work was limited.

2.     BIASED ATTITUDES FROM RESPONDENTS: Some respondents bluntly refused to give out the required information that i was in need of. Responses from some respondents and my present experience as a student serve as a stepping stone in conjunction with my textbook.

1.5. DEFINITION OF TERMS

       I.            MORTGAGE: This is a loan that is secured by a house when or other real estate property.

     II.            LOAN: This is a credit facility that is granted by a bank to its customers. This credit has a stipulated fixed interest rate and a period of payment.

  III.            FINANCE: This is a set of activities dealing with management of funds (money)

 IV.            HOUSING: This refers to a building or structure constructed to provide one with shelter.

    V.            POVERTY: This is the state of being inferior in quality or insufficient in amount (money).

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