Functions of Federal Mortgage Bank of Nigeria
According to the constitution of Nigeria, the Federal Mortgage Bank was established to meet the housing needs of all citizens of the country. However, most Nigerians do not know about the functions of the Federal Mortgage Bank of Nigeria. Thus, they have not been able to enjoy its services. This post will enlighten you on the functions of this institution.
The Federal Mortgage Bank of Nigeria is the apex mortgage bank in Nigeria. It was founded in 1956. As at the time of its establishment, it was known as the Nigeria Building Society (NBS). It was formed as a joint venture of the Federal Governments and Eastern Governments of Nigeria, and the Commonwealth Development Corporation. It was renamed to Federal Mortgage Bank of Nigeria (FMBN) in 1973 after the Federal government was given full control of the National Building Society through the Indigenization Act.
In 1994, the FMBN acquired the status of the apex mortgage institution in Nigeria with the proclamation of the Mortgage Institutions Act 53 of 1989 and the FMBN Act 82 of 1993. The Federal Mortgage Bank of Nigeria introduced a savings scheme called the National Housing Fund. It is a form of savings that organize and manage long-term funds from the federal government, banks, insurance companies, and Nigerian workers to promote the giving of loans at lower interests to contributors. Over the years, the Federal Mortgage Bank of Nigeria has undergone different kinds of reforms to promote and meet its mandate.
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Functions of the Federal Mortgage Bank of Nigeria
- The Federal Mortgage Bank provides long-term credit services to mortgage banks in Nigeria and other mortgage institutions at rates that will allow the mortgage banks and institution grant loans to individuals who want to acquire their own houses.
- It encourages and promotes the establishment and development of mortgage institutions at federal, state, local, and even rural levels.
- It encourages the growth of the required of lasting secondary mortgage institutions to meet the housing needs of Nigerians.
- The Federal Mortgage Bank of Nigeria gives licensing authority for secondary mortgage institutions in Nigeria.
- It monitors and regulates the activities of mortgage institutions in Nigeria.
- It collects and manages the National Housing Funds in a manner that conforms to the provision of the National Housing Fund Act.
- The Federal Mortgage Bank also mobilizes both domestic and foreign funds into the housing sector, and it is the link between the mortgage market and the capital market.
- From time to time, the bank also introduces different innovative mortgage-related programs and products to achieve its mandates.
The main goal of the Federal Mortgage Bank is to advance homeownership among every Nigerian by creating mortgage markets with a sustainable financing system. But the bank has encountered a lot of challenges in an unstable economy which has prevented it from achieving its objectives.
Currently, the Federal Mortgage Bank of Nigeria is partnering with mortgage institutions with the technical and financial capacity, who are interested in delivering affordable housing to the low and medium income earners.
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Source: Legit.ng
