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TOPIC: Banking
CONTENT: (a) Specialised Banking
(i) Development Bank
(ii) Mortgage Bank
(iii) Building Society
Sub-topic 1: Development Bank
Development Banks are specialised financial institutions which provide long term credit or loans to other enterprises for capital projects. They provide loans for projects in the area of agriculture, commerce, and industry. Examples of development banks in Nigeria are; Nigeria Industrial Development Bank, Nigeria Bank for Commerce and Industry and Nigeria Agricultural and Co operative Bank.
FUNCTIONS OF DEVELOPMENT BANKS
- Development Banks provide long term loans for capital projects in specific areas.
- They make funds available to manpower training institute.
- They also help in implementing government policies on industrial, commercial, and agricultural development.
- Development Banks gives advice to the industrialist on the best way to invest.
- They supervise industrial project in order to ensure the success of the project.
- Development banks also underwrite security issues.
- They undertake research to determine viable areas to develop.
EVALUATION
1a. What do you understand by the term Development Bank
1b. Explain the function of a Development Bank
Sub-topic 2: Mortgage Bank
Mortgage banks are financial institution that specialise in granting loans to individual and corporate bodies for building purposes. Such loans are repaid by instalments and can be spread over several years.
Mortgage banks accepts deposit from investing public at a rate of interest and use the fund to lend, at a higher rate of interest, to people who wish to own their houses.
The Federal Mortgage Bank was established to encourage people to save in order to own a house. It is the apex bank that is charged with the responsibility to supervise other mortgage banks.
FUNCTIONS OF MORTGAGE BANK
- Mortgage banks accept deposit from customers in order to encourage savings towards owning a house.
- They can provide long term loans to people or developers to build houses
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