AN ASSESSMENT OF THE AVAILABILITY OF FINANCE FOR RESIDENTIAL PROPERTY DEVELOPMENT IN NASARAWA
ABSTRACT
The focus of this study is to examine,
an assessment of source of finance on residential property development
in Nasarawa. The study attempts to explore the various sources of
finance that are available for residential property development with a
view to determining effective flow of funds. To achieve this some estate
surveying and valuation firms in Nasarawa that engage in residential
property development, some sources of financial institution that fund
residential property development and some developers were examine
through the use of questionnaires in order to know much about
residential property development in terms of fundings. Simple
descriptive statistical methods were used for the analysis and
presentation of the data. The study shows clearly show that high
interest rates to that of the numerous requirements from applicants for
loan, which in most cases they find difficult to meet bedeviled the
sources of finance in Nasarawa, beside the inflationary rate in the
Nasarawa also contributes to the sources of finance in residential
property development in Nasarawa. It recommended among others that the
Nasarawa government should try to help in terms of financing in
residential property development in Nasarawa.
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Housing is crucial to national
development and socio-cultural growth in any human society. Housing is
universally acknowledged as the second most essential human need after
food, and is considered a major economic asset in every nation.
Internationally, housing is recognized as a factor for the assessment of
human development and societal civilization (UNO, 1976). Hayakawa
(1983) noted that, “Housing which does not provide space for
contemplation will not allow for the growth and development of
individuality. Thus, housing not only contributes to the development of
man physically and mentally, but also contributes to the growth of
culture and human morals. In a broader sense, housing profoundly affects
a wider aspect of family and community life and wellbeing.
Residential property development is an
issue that only touches on the life of an individual, but also has the
potential to contribute to national development (Agbola, 1998). In
Nigeria, housing is a space within which a generation of families
expresses its existence and preserves the history and identities of
lineage. Families discover themselves according to their lifestyle and
dictates of the cultural values of the society to which they belong. The
family residential housing therefore is a symbol of social identity and
community recognition.
The successful completion of any kind of
development largely depends on the availability and affordability of
the essential factors requisite for such property development (land,
labour, building materials and finance). Finance being the most
significant determines the availability and quality of other factors, as
it is required to acquire land, reward labour and buy building
materials. Thus, this study seeks to examine the availability of finance
for the purpose of residential property development in Nasarawa town,
having due regards to its affordability.
1.2 STATEMENT OF RESEARCH PROBLEMS
The housing occupies a very unique
position in the life of all human beings and standouts as one of the
basic necessities of human beings after food as there is the innate
desire of every man to own a decent house.
In the hierarchy of societal needs,
housing has been ranked second and as a result of this, housing
provision has become a paramount cornerstone of the policies of various
governments both at federal and state levels since independence in
Nigeria. The consequences of the rapid rate of urbanization are most
visible in the rapid deterioration of urban housing resulting in urban
housing poverty especially as there is no proportionate increase in the
number of housing stocks.
Retardation in the growth of housing for
the increasing population triggered the interest for this research to
enquire into the possible reasons for housing shortage in Nasarawa.
Successful housing projects always dwell on the availability of land
with development potentials, building materials, labour and finance. The
first four factors (land, building, materials and labour) are
apparently visible in Nasarawa town, but the availability and
affordability of finance cannot be ascertained without a study of this
nature.
Thus, this study seeks to answer the
question of whether there is enough finance to support residential
property development in Nasarawa.
1.3 AIM AND OBJECTIVES
The aim of this project is to assess the
availability of finance for residential property development in
Nasarawa with a view to discover its accessibility.
In order to achieve the aim stated above, the following objectives were pursued:
- To examine the sources of finance for residential property development in Nasarawa.
- To assess the availability of finance for residential property development in Nasarawa.
- To identify the factors that hinders the availability of finance for residential property development in Nasarawa.
- To proffer solutions to the identified problems.
1.4 RESEARCH QUESTION
- What are the sources of finance for residential property development in Nasarawa?
- How availability and accessible is finance for residential property development in Nasarawa?
- What are the factors that hinder the availability of finance for residential property development in Nasarawa?
1.5 SIGNIFICANCE OF THE STUDY
This project will help to explain the
availability of finance for residential property development in
Nasarawa. It will be useful to the whole Nasarawa people by revealing
various means of sourcing finance for residential property development.
It will also help students, individuals or group carrying out research
of a similar nature as reference material to build on in the future.
1.6 SCOPE AND LIMITATION
The project is concerned with analytical study of availability of finance for residential property development in Nasarawa.
The study is geographically confined to
Nasarawa town of Nasarawa LGA Nasarawa State. It dwells only on the
availability of debt finance as opposed to other sources of finance for
residential property development only. The time scope within which the
study is focused is the previous decade (that is, 2006 to 2016). This is
to reduce the cost of the research to a manageable size so as to
achieve reliable results.
Although the scope of the study is
large, some of them gain their income through salary and some through
contribution for them to develop their residential property.
For a meaningful approach and critical
analysis of a work of this nature one has to put into consideration the
limited time and materials and confined to a specific area. As earlier
stressed, the project will focus attention on residential property
development in Nasarawa.
1.7 OPERATIONAL DEFINITION OF TERMS
Finance: According to Investopadia online dictionary Finance
is the science that describes the management, creation and study of
money, banking, credit, investments, assets and liabilities.
PUBLIC ESTATE: Are land
and building owned and directly managed by public authorities and those
rights of control which public authorities exercise over the estate of
the private owners.
ESTATE: Udechukwu
(2006) defined estate as “A legal entity denoting the character and
quality of right that an individual or individuals possessed on a
property.
HOUSING ESTATE: In the
word of Essien G.A (2012) in his Lecture Note “An Approach to Property
Development II (Vol. 3)”. “Is an area of land on which many houses are
built either by private enterprise or by a public authority”.
DEVELOPMENT: Is the
process of generating latent values in land or creating benefits there
from by incurring on it costs in the form of labour, capital or
management skill (Umeh, 1983).
PUBLIC DEVELOPER: Nathaniel
(1979) cited that public developer deal directly with government
involvement in the provision of housing, public properties (Estate) are
therefore owned, controlled and managed by Federal, State, Local
Government and other public bodies which are set up and functioned under
state and their aims is usually based on political, social and economic
ground.
1.8 HISTORICAL BACKGROUND OF THE STUDY AREA
NASARAWA TOWN
Nasarawa Emirate in Nasarawa State is
located in the Central region of Nigeria. It is flanked by Keffi and the
Federal Capital to the North. To the South, it is bounded by Benue
River and to the west, it bordered the present Gadabuka and Toto Local
government area which are of course, part of the Emirate. To the East,
it is bordered by Doma, Lafia and Keana Local Government Areas all of
Nasarawa State.
The founding of Nasarawa Emirate in 1835
AD was the consequence of palace tussle that arose in Keffi between
Umani Makama Dogo then Madaki of Keffi and Jibrilu, son of Abdu Zanga
(first Emir of Keffi).
Umaru later known as Makama Dogo was
born in 1958 at Ruma village in Katsina Emirate, his father was Usman
Kabawana and his mother Amina. Umaru migrated to Zana , having lost his
parent where he =-stayed with Emir Musa, he was accorded recognition by
Shehu Usman Danfodio, among the jihadists that captured Zana under Musa.
After receiving the flag from Danfodio,
Emir Musa sent Umaru Southward of Zana to spread the Islamic faith,
Umaru arrived at a place called Zana near thepresent Nasarawa region. He
met Abdu Zanga a Fulani normad from Katsina, they both became very
close that Umaru adviced them to present themselves to the Emir of Zana
for recognition, this was done successfully, which triggered the
granting of a request of Abdu Zanga by the then Emir of Zana to settle
in a place called Keffi which was ruled by Abdu Zanga since he was the
eldest with Gunki, his Madaki and Umaru as Makama.
In 1802, Keffi was famous for the
exploits of the great warrior Umaru and with Abdu Zanga. A
misunderstanding between Abdu Zanga and Makadi Gunki later made the duo
paeted ways.
On the sickbed of Abdu Zanga, he
gathered his brothers and sons and told them to appoint Umaru Makama
Dogo as the Emir of Keffi which was never realized after the death of
Zanga due to the betrayal to one Albarka. However , Makama Dogo was
advised to move Westward of Keffi where the Kwato (Igbira) resides,
fought then and established his own kingdom but he kicked against the
idea and moved Yankardi, where he camped about ten kilometer South of
Keffi.
Makama left his sons Ahmadu Manman
Galadima and Manman Sani in Keffi as a flash back. He later left
Yankardi where he arrived at a place occupied by Bassa speaking people
called TAMMAH, met Bagobiri known as Kasimau, who assisted him in the
establishment of a kingdom called Nasarawa (meaning victorious). Makama
Dogo fought many wars in the course of his Islamization, fought Afo
speaking people, conquered Ubbe, Usheni, Agwadama, Itta and Gwaffa.
Makama Dogo also conquered Panda due to
some misunderstandind between him and Ohimege (the ruler of Panda).
Makama Dogo fought the people of Toto (Igbira people) because of the
combination of Islam and traditional way of worship by the people. After
fighting other kingdoms like Dogo, Agaza and Udeni, Umaru told Madaki
Ahmadu his eldest son to continue leadership after his death and should
please be buried in Nasarawa town.
PHYSICAL CHARACTERISTICS
The major things considered under
physical characteristics of Nasarawa are, geographical location,
temperature, rainfall, geology, wind, vegetation, humidity, soil.
TEMPERATURE
The temperatures are generally high
during the day, particularly between the months of March and April. The
main monthly temperatures in the state range between 200C and 340C with the hottest months being March/April and the coolest months being December/January.
RAINFALL
The study area experience dry season
without or little’s rainfall from November to March of about 95mm, which
is wet season is from April to October of about 1.30mm,
GEOLOGY
From the Jos Plateau, this comprises of
basement complex metamorphic rocks, granite and basalt of two or more
ages. The basement complex is covered by shadow soil.
WIND
Nasarawa local government is determined
by the seasonal movement on inter-tropical convergence zone [ITCZ],
which represents the moving frontier between the moist Atlantic air from
the south and the dry air from the north. In the dry season from
November till March the north east wind are dominant. For the remaining
of the year, the south-western winds are prevailing. Generally, the wind
velocity is relatively low.
VEGETATION
Nasarawa is situated in the Benue valley
between the Benue river and Jos Plateau. This area lies within the part
of southern guinea savannah. The vegetation of Nasarawa has, to a large
extent resulted from extensive agricultural use of the land, the
predominant vegetation type is partly savannah which is characterized by
a discontinuous canopy, shrubs and grasses many areas are affected by
man through bush burning during the dry season. Among the common trees
are oil bean trees, locust bean free and isoberline trees.
RELATIVE HUMIDITY
The relative humidity is the measurement
of deepness of the atmosphere which varies from place to place and
different time of the day. The level of humidity in Nasarawa state in
January is quite less that 40% which rises as from February to July to
about 88%. By April when the steady rain commences it will be about 75%
by August when the inter-tropical discontinuity is at it northern part,
must position of the entire state will experience tropical marine wind
and continues till December.
SOIL
The major soil units of Nasarawa belong
to the category of oxisols or tropical ferruginous soils. The soils are
derived mainly from the basement complex and old sedimentary rocks.
Lateritic crust occurs in extensive areas on the plains while hydro
orphic soils (limbic incept sols) occur along the flood plains of major
rivers (Nyangba, 1995).
SOCIO-ECONOMIC CHARACTERISTICS
Nasarawa main economic activity is
agriculture; cash crop, such as yam, cassava and egusi (melon).
Production of minerals such as salt is also another main economic
activity of people in the state; Nasarawa produces a large proportion of
the salt consumed in the country.
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