This can negatively affect the local real estate market as a whole, and adversely affect even good projects. CRE is a highly volatile asset class in that credit losses in most years are relatively low compared with many other types of bank loans.
This can be seen in the way in which businesses sometimes evade taxes and wilfully default on bank loans, contributions to the NSSF or even paying salaries of employees. It is not uncommon for the owners and managers of businesses to divert business revenues or loans contracted by the business for their own personal use.