Department of Finance

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Browsing Department of Finance by Author "Matsiko, Isaac"

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    Financing of Real Estate Investments.
    (2023) Matsiko, Isaac
    This study was about assessing the impact of financing real estate investment within Stanbic Bank. The study was initiated as a result of the over-accumulation of non-performing loan assets within the bank related to real estate investment financing. To get to the bottom of the problem research was initiated with the following specific objectives which were i) to examine the financing practices of real estate investment within Stanbic Bank Uganda, ii) to assess the challenges of financing real estate investments by Stanbic Bank Uganda and iii) To identify strategies of improving real estate investments financing by Stanbic bank Uganda. To achieve the above objectives a sample of employees from the Stanbic bank credit section was used. These constituted both lower and top-level managers in the bank. Out of the 103 administered, 90 questionnaires were successfully filled and returned and 13 were not filled, implying a response rate of 87.4%. Questionnaires and interview guides were administered in addition to 7 interviews conducted. A cross-sectional research design was employed and it included respondents in two categories level and managers. On the practices, it was established that the bank offered specialized credit targeting real estate investments, and land acquisition loans, provided both residential and commercial mortgage. Besides that, they offered construction finance to real estate investment firms and formed partnerships with real estate investment firms. The challenges facing banks in financing real estate investments, included inadequate collateral, high levels of non-performing assets, and failure to attend to other non-real estate investments by the bank because of concentrating on real estate financing. The solutions operating under a sound credit-granting process; maintaining an appropriate credit administration, measurement and monitoring process; and ensuring adequate controls over credit risk were identified. Based on the findings it was recommended that the bank management should review its credit policy and establish a specialized real estate investment portfolio.