Availability of mortgage financing increases after historic signing
today
Georgetown, GINA, September 3, 2003
Three more financial institutions will now offer
mortgage financing for low-cost housing. At a signing ceremony
today, Guyana National Cooperative Bank/Trust, Demerara Bank Limited
and National Bank of Industry and Commerce Limited signed agreements
with the Government of Guyana to provide the financing.
Minister of Finance, Sasenarine Kowlessar said a few years ago,
the process of designating financial institutions as mortgage
finance companies was initiated. The three institutions will now
offer low-income loans for the construction of homes similar to
New Building Society Limited. He said three years ago Government
went to Parliament to have the necessary legislation enacted so
that the institutions would benefit from similar concessions given
to the New Building Society.
Immediately, two commercial Banks, Guyana Bank for Trade and Industry
and Citizens Bank came on board. Minister Kowlessar added that
one of those banks has already disbursed 184 mortgages, valued
at G$263.1M.
In 2002, the New Building Society increased its rate in mortgage
loans by 38 percent, indicating that there is a feasible market
for the provision of housing mortgages.
The Minster added that the institutions will be given concessions
in the form of an exemption from reserve requirements for that
level of operation and an exemption from corporation tax from
the interest income on loans given for housing development. He
said too that there are a number of conditions the institutions
must meet in the agreement.
For example, the Government has increased that loan threshold
from 1.5M to 2 million dollars and the borrower would have up
to 20 years to repay. This, the Minister said is added to the
institution’s capacity to lend up to 75 percent of the total
cost of construction. He noted that these concessions will be
reviewed from time to time and if necessary, amendments would
be made in the interest of all stakeholders.
Minister with responsibility for Housing, Shaik Baksh said that
these measures by the Government will have a positive impact on
the housing drive at the same time widen the market to provide
loans for low-cost housing. He said he hopes that the competition
would positively impact the interest rates in the interest of
borrowers.
Minister Baksh said to facilitate the massive housing programme
currently taking place in Guyana, there is need to garner all
resources available by the financial institutions. He alluded
to the large housing estates that are currently being opened.
The Minister referred to the Diamond/Grove estate comprising approximately
5,000 house lots, the Parfait/Harmony housing development where
6,000 to 7,000 house lots will be opened and the soon to be launched
Wisroc Housing scheme in Region 10, opening about 1,000 new lots
there.
Minister Baksh said that the focus of the Ministry is on housing
construction and a high rate of occupancy in the new schemes.
He said that the IDB/Government of Guyana low-income settlement
programme has undertaken infrastructural work in four schemes
and is now proceeding to do designs for another project.
He added that the European Union will make $10M Euros by the end
of this year and will be followed by more resources being made
available for infrastructural development of the new housing schemes
next year. This, the Minister said is being done with the hope
that more people will respond to the schemes with improved infrastructure.
The low-income Revolving Housing Fund operated by the Ministry
of Housing, where the private sector is involved in the construction
of houses, has also taken off. Under this fund, the Ministry advances
monies for the construction of individual homes, after which the
mortgage institutions take over the process. The Minister said
this is done in an effort to speed up and stimulate housing development.
The Housing Minister noted that another initiative to increase
the development of housing is the existence of about 12 housing
developers currently in operation. World Homes, Everest Construction
and the Barama Company are three of the largest developers operating.
The Barama group in the Grove Housing Scheme constructed two model-houses
made of wood.
He said that the Ministry is in the process of recruiting a mortgage
finance consultant through the IDB programme. The consultant will
advise Government on how to facilitate the granting of more loans
to the low-income group.
Minister Baksh said that problems at the Deeds Registry and other
institutions have been identified and work is in progress for
those bottlenecks to be straightened out. He noted that over the
past weeks, there have been several meetings to address the issue.
Signing on behalf of the Government were the two Ministers and
Chief Parliamentary Counsel, Mr. Cecil Dhurjon, while Mr. Roger
Duff, Mr. Hughley Nelson and Mr. John Alves signed on behalf of
Demerara Bank Limited, GNCB Trust and NBIC respectively.
While the three banking executives expressed gratitude at Government’s
leadership in opening the mortgage loan market, Alves further
expressed optimism that the difficulties experienced at the Deeds
Registry will be cleared up. He also expressed the hope that Government
would move from the issuance of transports, to the preferably
issuance of titles.
Minister Baksh said this has already begun to take place but the
transport facility already used cannot be reversed. Over the last
two years Government has been issuing titles to landowners.
TOP
Wednesday
September 3, 2003