The financial institution known as a building society is

Step 1: Analyze the question The question asks which type of financial institution a building society is. So we need to match its function to the right category.

Step 2: Explain the concept A building society is a financial institution owned by its members. It takes savings deposits and uses those funds mainly to give loans to members for buying, building, or renovating houses. Those loans are secured by the property itself, which is called a mortgage. In Nigeria, this role is played by mortgage institutions such as the Federal Mortgage Bank of Nigeria (FMBN).

Let's compare the options:

• A. Commercial bank: Accepts deposits and gives short-term loans to the general public and businesses. It is not focused on housing.
• B. Central bank: The government's bank, which controls monetary policy and issues currency (the CBN). It is not a building society.
• C. Mortgage bank: Specializes in long-term loans for property and housing, which is exactly what a building society does.
• D. Development bank: Gives long-term finance for industrial and agricultural projects (e.g., Bank of Industry). It is not for housing.

Step 3: Identify the answer A building society is essentially a mortgage bank.

Correct answer: C

Tip: Link keywords to institutions:

• Building/housing → mortgage
• Industry/agriculture → development
• Currency/monetary policy → central
• Everyday deposits/loans → commercial