EFFECT OF MORTGAGE INSTITUTIONS IN THE PROVISION OF AFFORDABLE AND SUSTAINABLE HOUSING IN AKWA IBOM STATE
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EFFECT OF MORTGAGE INSTITUTIONS IN THE PROVISION OF AFFORDABLE AND SUSTAINABLE HOUSING IN AKWA IBOM STATE
CHAPTER ONE
1.0 BACKGROUND OF THE STUDY
Housing (enough shelter) is universally recognised as one of the basic necessities of life and a requirement for human survival (Onibokun, 1983; Salau, 1990; United Nations, 1992). A house is a structure that offers shelter, refuge, comfort, security, and dignity. The housing business has the potential to stimulate the national economy (Onibokun, 1983).
According to Onyegiri and Okonkwo (2002), housing is a physical asset that is an intrinsic aspect of a nation’s wealth that is embodied in fixed capital. Housing is defined by the Federal Ministry of Works and Housing as
“the process of providing a large number of permanent residential buildings with adequate physical infrastructure and social amenities, (services) in planned, decent, safe, and sanitary neighbourhoods to meet the basic and special needs of the population.”
A decent place to live is one of the most basic needs of every individual, family, and community. The supply of housing for human living is thought to include both the physical structure and the immediate surrounding environment. It is one of the world’s significant concerns, affecting both industrialised and developing countries (Gumel, 2000).
According to (Zubairu, 2005), in Nigeria, the population is always growing, necessitating the need for functional and inexpensive buildings, and this problem is becoming increasingly massive and complex,
resulting in slums in major cities across the country. It was also observed that any nation’s development is dependent on the supply of suitable housing amenities for its population (Nubi, 2006).
Housing, as a package of shelter and services, becomes a true tool for macroeconomic development, complementing other sectors. It also has social benefits because inadequate housing correlates to low family incomes, but well-planned housing can boost national productivity,
save urban space, and reduce the cost of urban infrastructure (World Bank, 1975). Furthermore, as homelessness increases, the condition of the housing stock deteriorates, and ill-health and misery among those who lack adequate housing worsen.
Housing financing refers to funds provided by sources other than the dwelling’s residents or constructors for the building or purchase of housing. It covers construction money lent to builders as well as mortgage funds lent to individual families by private or governmental banks as well as a wide range of other financial entities. It also includes other sorts of government housing subsidies (United Nations, 1974).
Thus, a housing finance system consists of financial institutions, their legal status and administrative procedures, as well as the linkages and marketplaces that connect them. It is, in other words, a superstructure of laws, institutions,
and interactions between institutional and non-institutional units that facilitates financial intermediation and capital production in the housing sector.
A well-developed housing finance system is one that considerably eases the purchase, rental, building, and upgrading of dwellings for the general population (John C. Anyanwu Housing finance in Nigeria: the role of domestic financial institutions, January 1991).
It should be able to achieve this goal efficiently and inexpensively for those who are least able to afford housing, particularly low-income households and those who are otherwise economically disadvantaged due to the high cost of housing. A good housing finance system should be able to mobilise savings while also protecting their real value.
Furthermore, persons with income and/or assets above the eligibility limit for government or other housing subsidies but still too poor to purchase quality housing at market pricing must be given due precedence. Its effectiveness is also measured by how much the quantity and quality of housing in the active stock improves over the next decade.
Finally, an effective housing finance system is measured by its net macroeconomic impact, which includes the effect of housing resource mobilisation on aggregate savings and the availability of funds for other sectors, the impact on the national budget, and the amount of employ merit and value added generated by the housing industry (World Bank, 1983).
Many housing programmes have been launched in Nigeria, as in many other developing nations, to address the country’s housing crisis. However, these projects have failed to achieve the goal of providing homes for all. It was, however, an illusion because the great majority of Nigerians still do not have access to quality and cheap housing years after the target date of 2000 was set.
The issue is a lack of political will, as well as a lack of financial and other resources essential for home provision. The country’s population growth rate is relatively significant, and this is coupled by rising urbanisation, which stifles attempts made by successive administrations to provide housing.
Failures of previous public housing policies and programmes in Nigeria have been traced to inadequate knowledge of the nature, scope, and dimension of the country’s housing problems in both urban and rural areas, as well as a myopic and narrow view of Nigeria’s housing needs (FGN, 1990).
Housing financing is currently a serious issue for all households in Akwa Ibom State that are not in the super-high income levels. To some extent, the importance of solid housing in a family’s budget is simply a result of the fact that a home is the largest single consumer commodity a household can anticipate to purchase. The total cost of a house is frequently greater than five to 10 times a family’s annual income.
Most families would be unable to purchase or construct a home unless they saved for it practically their whole working life. Indeed, the importance of housing in the family budget has been exacerbated by the fact that land, construction labour, and building materials prices are rising far faster than salaries.
Consider the above summary; this paper tries to investigate the function of public housing finance in Akwa Ibom state, with a focus on the Akwa Saving and Loan Limited. Among other things, the work will identify the various programmes initiated by Akwa savings and loans limited,
as well as the procedure for financing and acquiring public housing in Akwa Ibom state, the role of Akwa savings and loans in housing development, and the challenges confronting housing finance institutions in Akwa Ibom state.
1.1 STATEMENT OF THE PROBLEM
Indeed, the Federal Government of Nigeria recognised that the domain of housing finance is the best place at which the most beneficial intervention can be made (Federal Republic of Nigeria, 1981). Despite this high priority intervention declaration, there is still a huge gap between housing needs and the financial resources required to provide them.
Indeed, Nigeria’s financial sector has grown swiftly and evolved in sophistication over the last decade, but the system remains unable to provide appropriate long-term funding to meet the people’s housing demands.
The Nigerian housing finance system is distinguished by the absence of a secondary mortgage market. Due to the lack of private sector building societies or mortgage institutions, for example, the federal mortgage bank of Nigeria (FMBN) has been unable to engage in full-scale mortgage banking and perform its role as the apex mortgage institution,
supervising, controlling, and developing other mortgage institutions. There is a dearth of safeguards or assurances in the form of actual mortgage insurance with its tax and regulatory benefits, which reduces the down payment required for individual house purchases and so makes loans available to lower-income people.
As a result, the purpose of this study was to investigate the function of public housing funding in Akwa Ibom State. The study examined the financing and acquisition of public housing in Akwa Ibom State. Savings and loans were limited in Akwa Ibom State.
1.2 PURPOSE OF THE STUDY
The general goal of this study is to investigate the role of public housing finance in Akwa Ibom State, with a focus on Akwa saving and loans.
This study’s particular goals are as follows:
(i) To identify the Akwa Saving and Loans Limited housing initiatives in Akwa Ibom State.
(ii) To evaluate the procedures for financing and acquiring public housing in Akwa-saving and loans limited.
(iii) Investigate the role of Akwa Saving and Loans Limited in Akwa Ibom State housing construction.
(iii) To examine the difficulties confronting Akwa Saving and Loan Limited’s home finance institution.
1.4 RESEARCH QUESTION
Which housing programmes has Akwa Savings and Loans Limited launched?
What are the finance and acquisition methods for public housing in Akwa Ibom State?
What roles do Akwa saving and loans play in housing development?
What are the issues confronting housing finance?
1.5 JUSTIFICATION OF THE STUDY
An evaluation study on the role of public housing finance in Akwa Ibom State is without a doubt significant. This is based on the assumption that the outcomes of the government’s recent housing initiative to address the issue of providing enough, affordable, and sustainable housing in this State are unknown. As a result, this study is significant for a number of reasons.
This study is thus justified on the grounds that it aims to provide fundamental facts that would improve our understanding of the organisational capabilities of Akwa Ibom State’s public housing financing institution. This is also thought to be crucial for evaluating the outcomes of public housing provisions and making appropriate recommendations.
Overall, this study is justified because there is a need for a formal examination of the various housing programmes utilised to finance public housing in Akwa Ibom State.
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