RELATIVE PERFORMANCE OF LOAN RECOVERY IN REAL ESTATE AND NON-REAL ESTATE SECTORS IN LAGOS METROPOLIS

Purpose: The paper investigates the recovery of loan granted for economic activities in some selected sectors of Nigerian economy. This was as a result of the growing trend of unrecovered loans with its debilitating effect on the overall economy which has become a worrisome challenge for sustainable economic development. Design/methodology/approach: The targeted population for the study comprises all commercial banks and Primary mortgage institutions in Lagos Metropolis. Fourteen (14) and forty (40) commercial banks and primary mortgage institutions respectively were randomly selected for the study. Furthermore, 3,197 loan accounts comprising of the fully recovered and partially recovered loans in different sectors of the economy were purposively accessed from the databases of the selected lending institutions between 2000 and 2015. Collected data were analysed using descriptive statistics, t-test and analysis of variance (ANOVA). Findings: The result revealed that the amount of loan recovered from various sectors of the economy is significantly different from one another. The t-test result reveals that the percentage of loan recovered from real estate sector is significantly higher in the fully recovered loan category than those in the partially recovered category, while the percentage value of loan recovered from agriculture, oil, mining, manufacturing and telecommunication sectors are significantly lower in the fully recovered loan category than in the partially recovered loan. Practical implications: The paper recommends that lending institutions should continue to make funds available and more accessible to all sectors especially real estate sector in order to boost economic activities thereby affecting the growth of the Nigeria economy. A study with larger sample that focuses on loan recovery across all lending institutions in African continent may be considered as a further study for a more adequate representation Originality/value: The research revealed that all the sectors under review achieved more than 50% loan recovery rate, however, the amount of loan recovered from the real estate sector is significantly higher than the amount of loan recovered from non-real estate sectors.