ZIMBABWE’S largest building society by assets and market share, CABS, has since August 2010 approved $101 million housing developments projects as the country’s mortgage financing recovers on the back of improved confidence in the financial services sector, NewsDay has learnt.
Report by Victoria Mtomba
Responding to written questions from this newspaper, CABS managing director Kevin Terry said $6,7 million had been approved this year for mortgage financing for low, medium and high-cost housing projects. He said the average default rate stood at 7,8% on the back of liquidity constraints on the domestic market.
“The environment has improved to a large extent. The public confidence in the banking sector has grown due to an increase in customer deposits and we believe that with increased funding, banks will be able to offer increased lending to the productive sectors in our economy,” he said.
Official figures show that bank deposits rose to just over $4 billion as at December 2012 from $300 million when government adopted the multiple currency system in 2009.
Terry said the amount allocated towards the housing projects was a function of credit lines sought by the society which is an ongoing process. CABS is a unit of insurance giant Old Mutual Zimbabwe.
Terry said the building society was continuing to look for ways to increase products into the market in a bid to consolidate its foothold.
“While we have not put in an application for a commercial banking licence, we have of late launched new products such as International Payments, Textacash, Cashpassport and CABS Bancassurance, which are a clear indication of our intention to offer a more comprehensive financial solution to our clients,” he said. “Our goal is to offer a wide range of financial products to cater for the different clientele we have on our books. We are also currently in the process of upgrading our banking system to meet the new product offering.”
Experts contend that the resurgence of mortgage financing in Zimbabwe, which in 2008 suffered contraction due to an unprecedented economic meltdown, has, in recent years, helped to boost the country’s construction sector. Presenting the State of Economy Report for March, Finance minister Tendai Biti said $2,1 million had been provided by the government for housing development.
The government is currently developing housing infrastructure in Dzivaresekwa, Tafara, Merivale and Mufakose. The country has a housing backlog of over one million units.
Biti in his 2012 National Budget presentation said the government managed to sample new technologies for housing development that would be implemented this year.