Posted: 2023 | Pages: 99 | Format: MS Word | Chapters: 1-5 | Others: Questionnaires & References

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ABSTRACT

Banking reform like land reform is one of the sector reforms that not only propel the wheel of rapid economic empowerment of a developing nation and serve as an anchor to other developmental efforts but is seen as the engine of attraction to real estate investment and finance in Nigeria. This research looked into the vision of consolidation, its reform strategy and its impact to Real Estate Practice in particular. The study went further to analyse banking reforms and real estate practice in particular behavior in Nigeria. Not only that, it examined banking reform as it affect financial empowerment and the propensity to attract real estate practitioner. However, four research objectives were developed to seek answers to the research questions. The study adopted survey research approach; using Osogbo as case study staff of CBN in Osogbo, Real Estate Developers, and Architects in Osogbo, Builders in Osogbo, Registered Estate Surveyors and valuers in Osogbo formed the population of the study. Samples of 210 questionnaires were distributed to collect data. Data returned from 180 respondents representing 82.2% of the distributed questionnaires were subsequently presented in the statistical tables and were analysed using simple percentages, while hypothesis were tested using Chi-square test statistic, and it was seen that banking reform negatively affects real estate practice in Osogbo. This negative effect include short term interest rate on loans for investor/estate developers, caused high and unstable inflation on and landed properties and loss  of employment opportunity for estate professionals. However it was also discovered that banking reforms created problems for real estate practitioners such as low patronage for estate practitioners, inadequate long term finance for investors and developers and complex and cumbersome documentation process for obtaining loans in Nigeria etc. to this effect the research recommends new areas that will generate income/job opportunity for estate practitioners should be explored. The bank could through the mounting of workshop to documentation requirement encourage DMBs to reduce the documentation process for loans and the various financial scheme established by the CBN should be monitored and evaluated on half-yearly basis to ensure their effectiveness and efficiency implementation, which will go a long way to correct the problem and effects of banking reforms on real estate practice in Osogbo and Nigeria at large.

CHAPTER ONE

1.1 BACKGROUND OF STUDY

        Banking reform which is the process of changing structure adding new policies, eliminating disserted banking policies and practice from the Pre-SAP (1970-1985) Post-SAP (1985-1993) the reform lethargy  (1993-1998) Pre-Soludo (1999-2004) had some effects on real estate  practice. Real Estate Practice involves determining the value of all descriptions of property and of the various interest therein, managing and developing estate and other business concerned with the management of landed property, securing the optimal use of land and its associated resources to meet social and economic interest. Determining the structure and condition of building and their services and advising on their maintenance, alteration and improvement, selling (whether by auction or otherwise) and buying and letting (as agent) of real and personal property and of any interest therein.

        Real Estate Practitioners saw that the new bank recapitalization policy has some implications on real estate development. The Nigerian Institution of Estate Surveyors and Valuers (NIESV), declared that the reform announced by the government of the Central Bank of Nigeria (CBN) Prof. Charles Soludo (2005) hiking the capital base of commercial banks to #25 billion which had a revolutionary impact on the nation’s socio-political and economic landscapes.  A former secretary of the professional body, Mr. Bode Adedji, explained that banking and real estate are to a large extent inseparable such that any development or problem in one sector will affect the other.    “The umbilical cord emanates from the nature of real estate which is capital intensive and requires long gestation period while the banks also depend on income and deposit from rents on real estate among other sources.” According to Mr. Adedji, the reform and recapitalization agenda has caused pains and gains in real estate that difficult to predict accurately. Arising from the scenario there was joblessness for property managers who manage assets in the banks. In the short and medium term, the fall and consistent implementation of the reform created depression on the property market. The reform has caused bank not to finance real estate development because only few banks now exist and can lend to real estate developers. The reforms lead to high inflation and high cost on land and landed property. The present era by Godwin Emefiele has created a cashless society which has helped and also improved transactions in real estate it has also made many estate practitioners who have multiple account and inconsistent bio data to loose their account due to BVN (Bank Verification Number). Deposit limit and withdrawal limit has become a hindering factors and as well a problem due to the high capital involved in transactions. In Nigeria the banking fundamental restructuring as orchestrated by successive banking reforms and policy which have caused some damages to real estate sector, and has not really helped to improve the real estate sector thereby making things difficult for real estate practitioners in their field of specialization. The above scenario gave rise to this study.