CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

Development banks are financial houses that act as specialists in providing money and facilities which encourage people, business firms to get their own houses without first saving the funds required. Housing is one of the important factors that determine urban firms and constitutes the single most serious problems facing large cities in Nigeria today. In 1950s and 1960s, the need small mainly because of low urbanization level.

The buoyancy of the Nigeria economy in the 1970s and the uneven spartan distribution of industrial development accelerated the rate of urbanization in Nigeria. The heretherto uncontrolled and unplanned urbanization resulted in housing shortages in qualitative and quantitative forms. There existed today a journey gap between the demand and supply decent accommodation. The consequence of excess demand over supply was high rent and the growth of informal rationing system which discriminated against the poor to the extent that over half of the urban populations in Nigeria live in slump.

Against this background and considering the fact that housing provides the physical frame work in which man’s social, economic and cultural resources are realized entrenched and integrated: it becomes obvious that adequate housing deserved great attention.

In realization of the importance attached to housing, the  government of Nigeria established the  Development bank of Nigeria on 20th January 1977 to take over the assets and liabilities of the Nigeria Building Society (NBS), which had been in operation since 1956. The Nigeria Building Society itself was the first Development institutions in the country.

Perhaps, the  Development had initial capital of the bank of twenty million naira (20m) and was later reviewed upward to one hundred and fifty million naira (N150m) in the year 1979.

STATEMENT OF PROBLEM

The problems inhibiting the  Development banks are much and this research study is intended to look into those problems.

The problems are as follows:

v    Lack of adequate finance.

v    High rate of interest

v    High rate of inflation

v    High rate of population growth and rapid urbanization.

v    Inadequate infrastructural facilities

v    Internal financial management constraints

v    Lack of delegation of function

v    Large-scale default

 OBJECTIVE OF THE STUDY

Realizing the roles of the  Development bankers in our national economic development, it is the view of this development of the  Development bankers. The study will therefore do the following:

v    Identify the variables that influence the  Development bank development in a society.

v    Examine the Nigerian society and show to what extent environment and policy discourages the emergence of a vibrant Development banks.

v    Offer suggestions aimed at creating an enabling environment for the development of a Development bank.

SIGNIFICANCE OF THE STUDY

This study will provide an opportunity for any person who may read it to appreciate what  Development banks means. There is no gain saying that it will proffer an immense assistance to potential banker through an indepth analysis of the expected problems that may seem a hindrance. And to these already managing a bank offer possible solutions to some of the problems they encounter while performing their duties.

The study, therefore, provides a useful guide to future researchers who may want to embark on a study like this.