Real Estate Financing in Sylhet: Problems and Prospects

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Real Estate Financing in Sylhet: Problems and Prospects

Abstract: Real estate is a legal term that encompasses land along with improvements to the land such as buildings, fences, wells and other site improvements that are fixed in location immovable. Real estate in Sylhet is not everyone’s cup of tea, but it can be a real adventure for those who are willing to try it. This business is emerging in Sylhet with enormous momentum. Investors are investing there for earning profit, because it is mounting up as one of the most profitable sector in business. Further prospect of the real estate business in Sylhet is something moralizing for the investors. At the starting, 45 apartment builder companies start their business operations. After 2000 private companies in this sector rapidly increased and at present there are at least 122 companies in Sylhet and at least 80 companies at present are in operation and out of which 50 real estate and 30 housing in REHB and out of this 80 two are from out of Sylhet and three are the members of REHAB. A real estate sub-committee of Sylhet Chamber of Commerce has been formed with 24 members. The findings of the study will be helpful to the authorities of the financial institutions, real estate and house building companies, policy makers of the government, and also to the existing customers and potential investors and customers.

1. Objective of the Study:

The core objective of the study is to analyze the financing pattern of Real Estate and House Building Companies in Sylhet. The specific objectives are:

(i)To build up a theoretical aspects of Financing of Real Estate and House Building Companies;

(ii)To understand the financial growth and development of real estate and house building companies in Sylhet;

(iii)To understand the existing financing practices of real estate and house building companies in Sylhet;

(iv)To identify the financing problems and prospects of real estate and house building companies in Sylhet;

(v)To give suggestions for the betterment of the real estate and house building companies in Sylhet;

2. Methodology of the study:

2.1 Selection of Sample: There are 122 Real Estate and Housing Companies in Sylhet and around 80 companies are in operation now. Almost all the companies are private ltd. In selecting sample public ltd. Companies and sole proprietorship firms are excluded. Considering the time and cost 10 real estate companies are taken as sample in conducting the study. Among financial institutions, nine (09) private commercial banks and one (01) non-bank financial institution have been taken as sample which extend real estate loan. The sample companies are selected considering the convenience of collection of data and information.

2.2 Selection of respondents: In collecting primary data the researchers reviewed the opinions of directors and executives of sampled companies, bankers in Sylhet and also customers of different real estate companies. The numbers of respondents in different categories are given below in table-1.

Table-1: Number of respondents in different categories

|Sl. No. |Category |Number of respondents | |1 |Directors -one from each (1*10) |10 | |2 |Executives- one from each company (1*10) |10 | |3 |Bankers (Executives of 09 private commercial banks) |09 | |4 |Executive (01) from non-bank financial institution |01 | |5 |Customers |50 | | |Total...
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