Posted: 2023 | Pages: 79 | Format: MS Word | Chapters: 1-5 | Others: Questionnaires & References

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ABSTRACT

First Bank of Nigeria having stood out and rated as one of the top banks providing credit facilities for real estate development in Enugu state is faced with some problems why trying to finance real estate development in Enugu. The research objectives are hereby to examine the role of First Bank in financing building projects in Nigeria, to determine the extent to which contribution of First Bank has affected Housing supply in the past three years and to examine the challenges encountered by First Bank in provision of credit facilities for real estate development. The study adopted a survey research approach. Staff of First Bank of Nigeria, Estate Surveyors and Valuers and Real Estate Developers formed the population of the study. A sample size of 296 was chosen using Taro Yamani model while stratified random sampling technique was adopted. Data retrieved from 235 respondents or 79.4% of the sample was subsequently presented in tables while frequency and percentages were used to analyze and answer the research questions. Findings of the study revealed that First Bank participates in financing real estate development in Enugu state through their loan, their repayment policy appear fairly flexible. Their most acceptable collateral security is landed property. in the last three years First Bank has immensely contributed to housing supply by empowering individuals to be involved in real estate development through the credit facility granted thereby causing an increased residential housing supply. Their constraints are inadequate fund for the growing number of loan applications coupled with high cost of building materials. This research concluded that First Bank of Nigeria has made significant contribution to real estate development in Enugu. furthermore, the study recommends that Bank should engage a staff who would be solely responsible for receiving customers queries, advising and guiding prospective developers on the correct process of securing loan at ease rather than the usual account officers. Individuals and real estate developers must supply honest information to the Bank to expedite the loan approval process.  Banks should endeavor to approval other types of collateral aside landed properties and equipment. Reviewing the approval process of perfecting title documents and regulation of prices of building materials

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

First Bank of Nigeria Limited (First Bank), established in 1894, is the premier Bank in West Africa, Nigeria’s number one bank brand and the leading financial services solutions provider in Nigeria. The Bank was founded by Sir Alfred Jones, a shipping magnate from Liverpool, England. With its head office originally in Liverpool, the Bank commenced business on a modest scale in Lagos, Nigeria under the name, Bank of British West Africa (BBWA). In 1912, the Bank acquired its first competitor, the Bank of Nigeria (previously called Anglo-African Bank) which was established in 1899 by the Royal Niger Company (firstbanknigeria.com, 2020). In 1957, the Bank changed its name from Bank of British West Africa (BBWA) to Bank of West Africa (BWA). In 1966, following its merger with Standard Bank, UK, and the Bank adopted the name Standard Bank of West Africa Limited and in 1969 it was incorporated locally as the Standard Bank of Nigeria Limited in line with the Companies Decree of 1968. Changes in the name of the Bank also occurred in 1979 and 1991 to First Bank of Nigeria Limited and First Bank of Nigeria Plc, respectively. In 2012, the Bank changed its name again to First Bank of Nigeria Limited as part of a restructuring resulting in FBN Holdings Plc (“FBN Holdings”), having detached its commercial business from other businesses in the FirstBank Group, in compliance with new regulation by the Central Bank of Nigeria (CBN). FirstBank had 1.3 million shareholders globally, was quoted on The Nigerian Stock Exchange (NSE), where it was one of the most capitalized companies and also had an unlisted Global Depository Receipt (GDR) programme, all of which were transferred to its Holding Company, FBN Holdings, in December 2012 (Joseph, 2020). Building on of its solid foundation, the Bank has consistently broken new ground in the domestic financial sector for over a century and two decades. FirstBank is present in the United Kingdom and France through its subsidiary, FBN Bank (UK) Limited with branches in London and Paris; and in Beijing with its Representative Offices there (Joseph, 2020). In October 2011, the Bank acquired a new subsidiary, Banque International de Credit (BIC), one of the leading banks in the Democratic Republic of Congo. In November 2013, FirstBank acquired ICB in The Gambia, Sierra-Leone, Ghana and Guinea, and in 2014, the Bank acquired ICB in Senegal. These were major landmarks in its plan for growing its sub-Saharan African footprint and all the African subsidiaries now bear the FBN Bank brand (Lawal, 2013).

As the global operating environment evolves, FirstBank has kept pace, responding to the dynamic needs of its customers, investors, regulators, host communities, employees and other stakeholders. Through a balanced approach to plan execution, FirstBank has consolidated its industry leadership by maintaining trans-generational appeal. Thus, the Bank has continuously boosted its customer-base, which cuts across all segments in terms of size, structure and sectors (firstbanknigeria.com, 2020).

Leveraging experience spanning over a century of dependable services, FirstBank has continued to build relationships and alliances with key sectors of the economy that have served as strategic building blocks for the wellbeing, growth and development of the country. With its huge asset base and expansive branch network, as well as continuous re-invention, FirstBank is Nigeria’s strongest banking franchise, maintaining market leadership on all fronts in the nation’s financial services industry (Sanusi, 2019).

First bank of Nigeria has been instrumental to several building constructions in the country as it provides credit facilities to both individuals and private investors for real estate development, the types of developments undertaken ranges from residential and non-residential buildings to heavy construction, and these physical facilities play a critical and highly visible role in housing supply in Enugu State (Kheni, 2018). First Bank form an important source by which many investors get funds to finance building and other real estate projects, as a money creating financial institutions they perform three major functions, namely acceptance of deposits, granting of loans and regulation of payments and settlements mechanism (Sanusi, 2019).
The major issue in building, real estate development and investment is finance. There is no iota of doubt that funding is an important factor in real estate development.  Moreover, availability and easy accessibility of building finance will definitely accelerate several forms of property development, some of the benefits of provision of building finance in Nigeria include;
Increased urban housing for the teaming Nigerian population,
construction of industrial estate for the localization of industries and commerce, increase in employment for those in the construction industry (Kheni, 2018). First Bank of Nigeria, having been involved in promoting core sector of the economy including housing development through real estate development finance is hereby the subject of the study.