Impact Of Banking Recapitalization On Real Estate Sector (A Case Study Of Osogbo, The Capital Of Osun State)

Impact Of Banking Recapitalization On Real Estate Sector (A Case Study Of Osogbo, The Capital Of Osun State)
Synopsis
The pre-consolidation era in the banking sector can be dated back prior to July 2004 when there were various banks existing and operating in the country. During this period, the total number of banks existing in the country was 89. After the consolidation exercise, the banking sectors was termed as being strong, stable and reliable mega bank. This is the first phase of the consolidation exercise which trimmed the number of banks in Nigeria from eighty nine (89) to twenty five (25) and with each of the existing banks, now having and average capital of about twenty five billion (N25 billion). The consolidation programme in the banking industry is expected to have wide ranging implication on real estate profession. Because real state is character relatively with large economy size, investors have traditionally relied on third party financial instruction for significant positions of funds require the investment control of large pared of real property is difficult to achieve without access to borrowed fund which have consequently become ambiguous factor in real estate investment decision. The different source of capital from real estate investment are equity and debt, syndications joint ventures, pension fund, life insurance companies, banking industry as a sector in the economy cannot stand and operates in isolation but to associate with various industries in order to actualize its aims and objectives. Real estate industry on its own is a vibrant sector which involves various professionals from various fields. The impact which recapitalization has on real estate investment in positive funds were available, members were commissioned in carrying out valuation for different purpose and big project were also finance.
Table of Contents
- Title page
- Certification
- Dedication
- Acknowledgment
- Table of Contents
- Abstract
Chapter One
1.0 Introduction
- 1.1 Background of the Study
- 1.2 Statement of Problem
- 1.3 Aim and objectives of the study
- 1.4 Justification of the study
- 1.5 Scope of the study
- 1.6 Limitation of the study
- 1.7 Historical background of Osogbo
Chapter Two
2.0 Theoretical Frame Work and Literature Review
- 2.1 Introduction
- 2.2 The concept of Real Estate
- 2.3 Real Estate in Nigeria
- 2.3.1 The Land Factor
- 2.3.2 Accessibility of Land
- 2.3.3 Finance for Having Development
- 2.3.4 The Building Materials Factor
- 2.3.5 The Nigeria Factor
- 2.4 The Nigerian Banking Industry
- 2.4.1 Pre-consolidation Era
- 2.4.2 Post-consolidation Era
- 2.4.3 Trends in bank consolidation
- 2.4.4 Impacts of recapitalization on banking industry
- 2.4.5 Problem associated with recapitalization
- 2.5 Effect of recapitalization on real estate market and the Nigerian economy
- 2.6 The effect of banking consolidation and it significance on real estate profession
- 2.6.1 Source of capital for real estate investment
- 2.7 Relationship between Banking Industry and Real Estate Industry
Chapter Three
3.0 Research Methodology
- 3.1 Introduction
- 3.2 Target Population
- 3.3 Sample Frame
- 3.4 Sample Size
- 3.5 Sample Technique
- 3.6 Source of data
- 3.6.1 Primary source
- 3.6.2 Primary secondary source
- 3.7 Data collection and source
- 3.8 Questionnaire design 4
- 3.9 Techniques of analysis
Chapter Four
4.0 Data Analysis, Presentation and Interpretation
- 4.1 Introduction
- 4.2 Examination of the property market prior to the recapitalization
- 4.3 The perception of stakeholders on the impact of recapitalization on the real sector
- 4.4 The result of the bank recapitalization programmes
Chapter Five
5.0 Summary of Findings, Recommendations and Conclusion
- 5.1 Introduction
- 5.2 Summary of findings,
- 5.3 Recommendations
- 5.4 Conclusion
- References
Chapter One
1.0 Introduction
1.1 Background of the Study
The trend in the Nation’s economy in this recent year particularly from the dawn of the democratic salting, the would be revealed that, this has been innovation and reforms to the various sectors of the economy most especially the banking sub-sector of the economy. This development in the banking sector is what is generally known s the bank recapitalization or bank reformation whereby the former capital base of various banks existing in the country was raised from two billion naira (N2 billion) to twenty five billion naira (N25 billion). This is by far the most profound monetary policy measure, witnessed by the banking industry in Nigeria since its interception in 1892.
The key driving force behind this policy is to transform Nigeria banks from the weak, marginal players they have been, to mega banks that would ultimately perform effetivelly in the strong global competitors. The second and equally important reason is to better position these banks to cope with the vagaries of the Nigeria operating environment and endow them with the capacity to finance major project and real sector activity like their counterparts in the advance economics. This development has made the total number of bank in the country to be reduced to just twenty five.
Estate surveyors and valuers have over the recent years been able to discharged their professional duties and services prominent among which is valuation which is a bid to establishing the values of this bank so as to facilitate the merger acquisition, consolidation, asset sharing, etc on relevant bases. In order to present a comprehensive dissertation on this topic i.e the impact of the recapitalization process on the real estate sector. There is a need to build the impact from diverse and given necessary details as may be demanded.
Real estate sector (market) is a place where bundles or clusters of right are being exchanged. It could be a system of transaction between landowner, land user and estate agents.
Real property investment is a capital formation of new asset which involves creation of real estate products such as commercial building, residential building. It can also be described in the sector ranging from commercial sector, residential sector and industrial sector etc.
Since it has been said earlier that banks from the weak. Marginal players they have been in to mega banks that would ultimately transform into strong global competitors and to better the position of these banks to cope with the vagaries of the Nigerian operating environment and endow their with the capacity of finance major industry project and real estate sector activities.
In view of this, the project work will focus on examine, identifying analyze and recommend all necessary things as regard the impact of commercial banks recapitalization process on real professions.
1.2 Statement of the Problem
In Nigerian today, research has shown that real estate sector face some challenges, which has posed problem or set back in the sector. Some of the challenges are lack: of adequate funding, high cost of building, heavy reliance on imported items and costly housing design, low returns from real estate. Since real estate is characterized by relatively large economic size, investors have traditionally relied on third party financial instruction for significant positions of fund required for investment. Control of large parcel of real property is difficult to achieve without access to borrowed fund, which have consequently become ambiguities factors in real estate investment decisions.
Banking sector, which was the major source of development finance, reneged on it role of financing sustainable economic development by rather supporting the import dependence nature of the economy. Most of the revenues generated by bank before consolidation to the highly fragmented nature and the weak capital base of Nigerian commercial banks as at that time.
In doing this, certain questions become imperative; what is really meant by recapitalization? Why recapitalization? What are the machineries put in place? What was the state of banks in the pre-consolidation era? What was the state of banks in the post consolidation era? What is the relationship between banking industry and real estates sector? What are the impacts of the reform on real estate sector? What are likely shortcomings or challenges of this reform on real estate and banking industry? What are the probable solutions? So this project work is faced with challenges of proffering solutions to some problems that arise in the process of commercial bank recapitalization with emphasis is real estate sector.
1.3 Aim and Objectives of the Study
The aim of this study is to evaluate the impact of bank recapitalization in real estate sector of the economy.
Objectives
- To examine the real estate market prior to the process of recapitalization.
- To assess the recapitalization of the affected banks in the study area
- To examine the impact of recapitalization on the real estate sector
- To identify the problems of the recapitalization on the real estate sector and to suggest possible solutions.
1.4 Justification of the Study
Property (real estate investment in any given country involves large sum of money or capital commitment and also takes a long time to complete when compared to other forms of investment. The general economic condition of country is one of the major determinants of the level rate of real estate investment. The issue of incurring base now becomes a necessity in the development of real estate. The capital could be gotten from equity finance that is, from one’s saving, profit drawn on other business that are capable of carrying out development, including ways in which income would be earned without incurring debt. The other sources of development finance is gotten from debt finance, which ensures a liability on the developer to a second party that could be termed the financial on investors. As compared with equity finance where the developer is the investor to the land finance e.g from friends, banks, financial, institution, trust and bonds, property companies, government, pension funds and insurance etc of al sources of debt financing in Nigeria, bank and other financial institutions seem to be the largest dominating factor on real estate financing.
The property and development, gazette (1991) recognizes that without a well-organized and efficient housing finance system. It is difficult to mobilize substantial financial resources for channeling funds in to the real estate sector.
In the light of this, various works have been concerned with the problem of banking industry in Nigeria economy from a broad view Oboh G.A.F (1991), carried out a research work on banking and Nigeria economy. Contemporary issues in the Nigeria banking system. However, during the time they were carrying out the research, the banking sector, which was the major source of finance reneged on its role of financing sustainable economic development by rather supporting the import dependence nature of the economy.
Most of the revenues generated by banks before the recapitalization program was import business related. This was largely due to the highly fragmented nature and the weak capital base of Nigerian commercial banks as at that time.
Therefore, this study seeks to establish link between the reforms initiated by the central banks of Nigeria (CBN) and the accessibility of real investor to finance in order to ensure better performance and this, reduce the problem of real estate to the barest minimum.
1.5 Scope of the Study
This project work sought to establish the impact of recapitalization programe on real estate sector in Nigeria. However, as a result of time constraint, the writer limited the scope of this study to Osogbo.
Ideally, the study was supposed to embrace all the banks that were recipients of the recapitalization exercise and that are situated in Osogbo as well as the estate firms involves in the real estate practices, but the writer decided to focus on a random selection of the estate firms registered under estate surveyors and valuers registration Board of Nigeria (ESVARBON) and some banks that survived the recapitalization exercise.
1.6 Limitation of the Study
In the course of carrying out the research work, the following were the challenges encountered by the researcher.
There was the challenge of time constraints in which case, there was limited time to carrying out this research work, in the same vein, there was also the constraint of funds to carry out a very thorugh research work. There was also the challenge of retrieving all the questionnaires administered to these respondents and nonchalant attitude from the respondents.
1.7 Historical Background of Osogbo
In Yoruba mirth, Osogbo as a historical town was founded by Osun a river of goddess and wife of legendry king Sango of the ancient Oyo Empire Osogbo’s prominence as an important tourist attraction stems from the Osun River where the Osun grooves and shrine are both located. As early as 1929’s Gesman Art connoisseurs stated flocking to Osogbo to afford themselves of the fertile Osogbo art in Textile design and fertility frame evidence in sympathetic magic in the Osun goddess. Little wonder, Osogbo is praised as Osogbo Ilu-aro, Oroki asala, “Osogbo the town of dye, Oriki the one that embraces all”
Notable among these Germans Swan Wenger who was the moving figure behinds the imbari art movement was a training ground for performing literary and visual artistes who were later bestrode the artistes framament like colluses.
The point being chorused is the fact that Osogbo has always played lost to visitors and thus have compelled the need for terminal expansion and accommodation beckoning. At another level, with the contact of British colonial administration, Osogbo became a prominent town as the capital of Osun division which was home to the colonial representatives in the area.
To crown it all commerce becomes centred in Osogbo with the coming of J. B Olivant, Peterson Zochonis and Royal Niger company later UAC, Mr. Bigg’s, Species and enactment of Banks like bank PHB, Spring, Intercontinental bank, Pacific, UBA, Zenith all extended there merchandize tentacles in the city.
The coming of Railway and sitting if terminus at Osogbo also share up into the compelling housing need at the city. By the way, employees of various government and non-government organizations settled down in Osogbo and necessitated an accelerated, affordable medium size low income housing need.
Chapter Five
5.0 Summary of Findings, Recommendations and Conclusion
5.1 Introduction
This chapter contains the summary of the findings of the researcher as well as the general interpretation of the findings, the recommendation posited by the researcher and the conclusion of the work.
5.2 Summary of Findings
During the course of our survey, data collection and analysis and interpretation was discussed as follows:
- It was observed that over 60% of respondents were estate surveyors posited that the condition or real estate market before recapitalization was in better condition. In the same vein, the respondent said that they don’t really involve in property development because of financial constraint.
- The respondents also supplied information on choice of real estate financing option, 45% of the entire respondent used commercial banks, in the study area. At the same time, the respondents agreed that the high interest rate has been the setbacks for loan application for better practice of real estate market in the study area.
- When asked through the questionnaire distributed to the respondents about the gains and result of the bank recapitalization exercise a large percentage of both set of respondents opined a likely increase in the quantum of funds available for loan, the involvement of bank in property development as well as the possibility of a decrease in the lending rates of banks.
5.3 Recommendations
From the analysis of the stakeholders option in relation to the examination of the bank recapitalization programe, the following are the recommendation made by the researcher.
- The public sector should ensure that there is the enabling environment for the smooth performance of the private sector in the economy. Areas such as the difficulties encountered in the acquisition of land and the perfection of title documents.
- More funds should be made available by the banks by reason of the recapitalization exercise for the purpose of advancing loans for real estate development.
- The banks should also be involved in the provision of residential, commercial or industrial housing. This will in turn help in the reduction, if not the eradication of the real estate problem in the study area.
- In order to make the benefits of this reform be a long effect, there is the need for continuing professional training and workshops on post consolidation integration and corporate culture conflict management. This would assist to mitigate conflicts associated with the reform, thereby financing the sustainability of the mega banks.
5.4 Conclusion
This study has suggested that there are potential gains to be derived from the bank recapitalization exercise that was initiated by the central bank of Nigeria. There is the likelihood of a reduction in the lending rates of banks, the likelihood of an increase in the quantum of funds available for loan purposes as well as the likelihood of banks getting themselves in the production of real estate property. These coupled with a suitable and enabling environment from the real estate investor would insure better performance and the eradication of real estate problem in the study area.
Also, the recapitalization exercise has made it possible for professionals in the real estate sector to accumulate wealth through their charges in services rendered to the banks during the mergers and acquisitions process, valuer earned income in valuation exercise in merger or acquisition process. The exercise allowed under participation as early said made it possible for real estate sector to enjoy wide participation interns of human and capital inflow. Since majority of banks now have to source for more channels of increasing returns to stand the pressure from the shareholders banks will result to investing in real estate which will make them to enjoy capital appreciation and income security and make the real estate sector buoyant.


The Complete Material Will Be Sent to You in Just 2 Steps
Quick & Simple…
![]()
Make Payment (Through Transfer) of ₦5,000 to the Account Below
![]() | Acc No: 0811003731 |
| Samphina Academy | |
| Current Account |
Or CLICK HERE To Pay With Debit Card
| FOR STUDENTS OUTSIDE NIGERIA | |
| CLICK HERE To Pay With Card ($15) | |
| FOR GHANA STUDENTS (GHS 100) | |
![]() | MTN MoMo |
| 0553978005 | |
| Douglas Osabutey | |
![]()
Send the Following Details on WhatsApp ( 07062590260 ) After Payment
- Payment Details
- TOPIC: Impact Of Banking Recapitalization On Real Estate Sector (A Case Study Of Osogbo, The Capital Of Osun State)
The Complete Material Will Be Sent To You On WhatsApp After Receiving Your Details
T & C Apply
Students Review
List of Related Works
The Effect Of Recapitalization In The Banking Industry
The Impact Of The N25 Billion Recapitalization By The Central Bank Of Nigeria On Commercial Banks
Impact Of Recapitalized Commercial Banks On SME Development
Impact Of Recapitalized Commercial Banks On SME Development In Nigeria
Bank Recapitalization And Banks Development In Nigeria Income As A Measure Of Development
Impact Of Bank Recapitalization On The Performance Of Small And Medium Enterprises In Nigeria
Recapitalisation Policy And The Banks Performance In Nigeria (1995 – 2010)
Bank Recapitalization The Imperatives, Implication, Strategy And Options
Impact Of Bank Recapitalization On Stock Market Development
Effect Of Recapitalization On Liquidity And Profitability Of Banks In Nigeria
The Impact Of Recapitalization On The Performance Of Banks In Nigeria
The Impact Of The 25 Billion Recapitalization By The Central Bank Of Nigeria On Commercial Banks
The Impact Of Recapitalized Banks And Their SME Customers In Nigeria
Recapitalization And Consolidation Exercise In The Banking Industry
Bank Recapitalization And Small And Medium Scales Enterprise In Nigeria
Deposit Money Bank Recapitalization And Small Business Growth In Nigeria
Recapitalization And Bank Performance In Nigeria
Recapitalization Policy On The Banking Industry: It’s Impact On The Nigeria Economy
An Assessment Of Repositioning Through Recapitalization Of Banking Sectors In Nigeria
Recapitalization Policy And The Banks Performance In Nigeria (1995 – 2010)
The Impact Of Re-Capitalization Of CBN On Deposit Money Bank Profitability
Impact Of Recapitalized Commercial Banks On Small Medium Enterprise Development In Nigeria
The Implication Of Recapitalization Policy On The Performance Of Commercial Banks
Assessment Of The Process Of Procurement Of Investment Loan For Real Estate Development In Nigeria
Real Estate Investment And It’s Associated Challenges In Nigeria
An Appraisal Of Investors Confidence In The Nigeria Real Estate Sector
Impact Of Real Estate Sector To The Economic Growth Of Nigeria
Design And Implementation Of Users Application Software For Real Estate Management Practice
Impact Of Inadequate Infrastructure Delivery On Real Estate Development
Professionalizing Real Estate Agency Practice In Nigeria; Issues And The Way Forward
Challenges Associated With Real Estate Investment In Enugu Nigeria
The Influence Of Online Marketing On Real Estate Business
Proliferation Of Unregistered Estate Agent In Real Estate Market
Examination Of Roles Of Social Media In Real Estate Agency In Owerri Imo State
Effect Of Building Collapse On Investors Of Real Estate In Nigeria
Infrastructure Development, Real Estate, And Housing Policy In Maiduguri, Borno State
Design And Implementation Of A Real Estate Management System
The Impact Of Depressed Economy On Real Estate Finance
Challenges Associated With Real Estate Investment In Umuegbulle-1, Rivers State
Effects Of Building Collapse On Real Estate Investors In Nigeria: A Case Study Of Asaba, Delta State
Infrastructural Development, Real Estate Agency Re Branding And Review Of National Housing Policy
The Impact Of Higher-Education Institutions On Residential Property Values In Ilesa, Nigeria
Incorporating Risk And Uncertainty Into Real Estate Valuation And Investment Appraisal
Appraisal Of Residential Real Estate Development
Financing Of Real Estate In Nigeria (A Case Study Of Ebeano Housing Estate Enugu)
The Influence Of Online Marketing On Residential Real Estate Market
The Role Of Insurance Companies In Real Estate Development In Nigeria
Effect Of Environmental Pollution On Real Estate Development


