Property

Banks Incursion into real estate unfair – Chidozie

By Dada Jackson

Managing Director of Witchtec Construction Company Mr. Chidozie Nwankwo has reiterated his call to banks to refrain from dabbling into real estate, even as he posited that this development has been depriving private property developers from accessing loans from financial institutions

He stated this in an interview with NewsDirect.

According to him, over the years, it was rather ‘unfortunate’ that most banks have veered into core construction, adding that this development has slowed down activities of private developers from providing massive housing for the people.

His words ‘to be quite frank with you, banks do not have any business in construction or real estate. Their incursion into real estate is quite unfair. Let me put it succinctly that by veering into real estate, I would say has brought about an unfair competition’.

Nwankwo decried a situation where most developers’ were finding it difficult to approach banks for  loans, pointing out  that  in most cases these banks have either refused to grant them the loans asked for or demanded for stringent loan conditions. He was quick to add, that  a situation where as a developer, one approaches a bank for loan and is asked to go and write a proposal for consideration and before you know it the same bank goes ahead to utilise the said proposal for its own purpose was pathetic and unethical..

According to him, the incursion of banks into real estate has stalled most housing projects by private developers as a result of their inability to source funds for construction.

He added that most of the banks now prefer to engage in actual construction thereby holding on to funds that would ‘ordinarily’ have been loaned out to developers who approach them for assistance.

Nwankwo further said that some of the banks have even gone ahead to create department that is responsible for handling real estate matters.

He appealed to such banks to concentrate on core banking matters and leave construction to those that have comparative advantage in handling such issues.

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