Methods of Valuation Utilization for Secured Lending in Northcentral Nigeria

Abstract

Methods of utilizing valuation reports for secured lending in Nigeria have not attracted sufficient research attention. This study,  therefore, seeks to examine how deposit money banks (DMBs) apply the reports for loan underwriting in Northcentral Nigeria. Primary  data collected from DMBs were analyzed using descriptive statistics and ANOVA. Although the methods adopted by the DMBs for utilizing valuation report did not conform to the international standards of Basel III and the International Valuation Standards Council (2017), they however supported the concept of a uniform sequence of valuation utilization. They also agreed with the application of both soft and hard copies of the reports during the process. Refusal of DMBs to adhere to international standards of valuation  utilization could lead to mortgage valuation failure in the study area. The study, therefore, recommends that the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON) should sensitize the Bankers Committee and their credit officers on the standardized and orderly procedure of valuation utilization as mandated by valuation regulators. While ESVARBON is enjoined to specify the  appropriate methods of using valuation reports in the Nigeria Green Book, the Central Bank of Nigeria should equally include them in the Prudential Guidelines for Secured Lending (2010).

Keywords: Methods, Valuation Utilization, Secured Loans, Northcentral Nigeria