The Effect of Mortgage Institutions in the Provision of Affordable and Sustainable Housing in Akwa Ibom State
CHAPTER ONE
AIM OF STUDY
The overall aim of this study is to examine the Role of Public Housing Finance in Akwa Ibom State emphases on Akwa saving and loans limited.
The specific objectives of this research are:
- To identify the housing programmes initiated by Akwa Saving and Loans Limited in Akwa Ibom State.
- To assess the procedures of financing and acquisition of public housing in Akwa-saving and loans limited.
- To examine the Role of Akwa Saving and Loans Limited in housing development in Akwa Ibom State.
- To assess the challenges facing housing finance institution in Akwa Saving and loan limited.
CHAPTER TWO
REVIEWED OF RELATED LITERATURE
Concept of Mortgage Finance
First and foremost, a mortgage is a pledge of property as collateral for a loan; the mortgage becomes a lien on the property’s title or the title is held in trust until the loan is repaid. Simply, a mortgage is an agreement by which a borrower offers his/her legal right to posses or dispose of property (title) as security for a loan. Usually, the borrower pays off the loan by monthly installments of both principal and interest. If the borrower is found wanting, the lender can terminate the mortgage, put up the property for sale in order to repay the money lent. Taking above explanation into consideration, mortgage finance is money lent to a borrower by a mortgage institution on the security of a house or other property owned by the borrower, usually in order to enable the borrower to buy the property with detailed payment schedule and interest (Colaniran, 2003 cited in Okidim and Ellah, 2013). In other words, Ezimuo, Onyejiaka and Emoh (2014) explain that any time a loan is granted and committed for housing, the property in turn serves as collateral for the debt. The mortgage institution’s claim on the property comes to an end as soon as the borrower fully repays the said loan. In a mortgage agreement, the lending institution is also called mortgagee, while the borrower is also called mortgagor. Mortgage financing commenced with the setting up of Nigeria Building Society (NBS) by the colonial master in 1957. This initiative was designed to gather funds required to deal with housing and related needs. Housing Corporation with focus on living accommodations was established shortly thereafter. In order to advance course of ameliorating consequences of housing problems in Nigeria together with the NHP, mortgage institutions were required to source funds from mortgage banks for on-lending to potential house owners. .Examples of mortgage financial institutions in Nigeria includes the Federal Mortgage Bank of Nigeria (FMBN) and the many primary mortgage institutions (PMIs) – the focus of this paper. The specific functions of PMIs involve savings mobilization, mortgage financing and investments. Deposit taking from the public into different accounts such as house ownership savings account; personal/general savings account; education endowment savings accounts; joints savings account; target savings account, etc. is the core mandate of PMIs. These various deposit accounts catalyze high deposit accumulation for PMIs, thereby constituting their primary source of capital formation. For the purpose of boosting deposit gathering, most PMIs create appealing products in addition to the National Housing Fund (NHF) loans like estate development loan, etc. (Adebamowo, Oduwaye and Oduwaye, 2012). Lending from savings deposit to businesses stimulate economic activities especially in the housing sector. Agbada and Ekakitie-Emonena, (2016) citing (Quijano and Quijano, 2003) argue that the amount of capital, ceteris paribus, determines the amount of output that is produced; and in like manner, the amount of output determines the amount of savings and investments and so the amount of capital accumulated. The amount of domestic savings is a measure of a robust mortgage market. Perhaps, the higher the amount of savings collected, the higher the amount of loanable funds available for mortgage and for investments in the other segments of the economy. Mortgage finance is another important business of PMIs pursuant to the legislations that anchor their existence. Mortgage finance is credit facility given for erecting living accommodations and other housing needs. Sanusi (2003) assert that owing to high value government place on provision of decent and affordable accommodations for the citizenry, the CBN through its credit policies enabled commercial and merchants banks to allocate a stipulated minimum quantum of their credit to fiancé the housing programmes of the government. It is stipulated that “Where banks failed to meet the stipulated target, such shortfalls were deducted at source from the defaulting bank’s deposit with the CBN and passed on to the housing/construction sector through the Federal Mortgage Bank of Nigeria” (Sanusi, 2003). The author also posits that other non-bank financial institutions like insurance companies possess core competencies required for overall housing development for reason of their expertise, stable funds as well as long-term nature of their liabilities. For instance, funds from life insurance policies supply suitable finances that can be harnessed to meet the housing sector needs. Investment is the third important business of PMIs. It denotes a commitment of something such as money, effort and time to an activity, project or undertaking for a profit, and appears the most volatile (unpredictable) activity. Investment is viewed as one of the key determinants of state of economy of a country. Agbada and Ekakitie-Emonena (2016) see investment from two perspectives with regard to PMIs’ operations: housing investment that relate to the activity of developing physical infrastructure, superstructure and associated facilities of buildings, and investment in assets and securities that PMIs may engage in with their surplus funds.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Introduction
It is important to ascertain that the objective of this study was to ascertain the effect of mortgage institutions in the provision of affordable and sustainable housing. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the effect of mortgage institutions in the provision of affordable and sustainable housing.
Summary
This study was on the effect of mortgage institutions in the provision of affordable and sustainable housing. Three objectives were raised which included; To identify the housing programmes initiated by Akwa Saving and Loans Limited in Akwa Ibom State, to assess the procedures of financing and acquisition of public housing in Akwa-saving and loans limited, to examine the Role of Akwa Saving and Loans Limited in housing development in Akwa Ibom State and to assess the challenges facing housing finance institution in Akwa Saving and loan limited. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Mortgage Institutions in Akwa Ibom. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
In conclusion, the findings of this study highlight the intricate interplay of factors influencing the provision of affordable and sustainable housing in Akwa Ibom State. The role of mortgage institutions is instrumental but requires continuous refinement and adaptation to address the evolving needs of the population. Policymakers, housing developers, financial institutions, and civil society organizations must work collaboratively to bridge gaps, expand access, and enhance the sustainability of housing projects.
This study serves as a stepping stone for future research and policy initiatives aimed at further improving housing accessibility and sustainability in Akwa Ibom State. By embracing innovative solutions and ensuring that the benefits of homeownership are accessible to all, we can move toward a more equitable and prosperous housing landscape for the people of Akwa Ibom State.
Recommendation
Based on the findings and conclusions of the study on the effect of mortgage institutions in the provision of affordable and sustainable housing in Akwa Ibom State, the following recommendations are put forth to address the challenges and capitalize on the opportunities identified:
- Collaborate with housing developers and private sector stakeholders to incentivize and facilitate the construction of more affordable housing units across Akwa Ibom State, particularly for low and middle-income earners.
- Mortgage institutions should diversify their product offerings to cater to a wide range of borrowers, including those with varying income levels and credit profiles. Tailored mortgage options can enhance accessibility.
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