THE National Building Society (NBS) opened its doors yesterday, offering the lowest interest rates of 9,5% for mortgage lending, with a tenure of 25 years, the longest on the market.
BY VICTORIA MTOMBA
Mortgage lending in the market hovers at around 12%, with a maximum tenure of 20 years.
Speaking at the opening of the institution, NBS’s managing director, Ken Chitando said the society was targeting 2 000 housing units annually.
“We will be looking at the market at large. We will be looking at development financial institutions, who have particular interest in affordable housing. The interest rate will be a single digit, 9,5%,” he said.
The bank is targeting low income earners and will provide houses, as well as financing housing construction.
NBS chairman, Gamaliel Bwanya said the company was planning for one or two housing projects to start before year end.
“We are targeting Glaudina, a land bank owned by the National Social Security Authority. We are targeting that as our first project. There is also a NSSA land bank in Bulawayo and we are looking at commencing something there as well,” he said.
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Chitando said the building society would take deposits and do transactional, banking services and will also offer bancassurance services.
Guest of honour, Vice-President Emmerson Mnangagwa said the entry of another building society augurs well for the deepening of financial inclusion in Zimbabwe and will fill the void in the sector, as other institutions had been struggling to provide cheap and affordable long term financing in the mortgage sector.
“To that end, I exhort you to capture that market, which has been traditionally excluded from accessing mortgage financing, like vendors, cross border traders market gardeners, artisanal miners, subsistence farmers and informal traders to name, but a few,” he said.
NBS was given a certificate of registration in December 2015 by the central bank. On April 22, NSSA completed the $25 million capitalisation of NBS.
Zimbabwe has a housing backlog of 1,25 million and government is targeting to build more than 300 000 housing units by 2018 to ease the shortage. Mnangagwa said housing developments have been limited by insufficient national budget allocations, which have been a result of the constrained fiscal space.
The country has been short of mortgage lending since dollarisation, but many banks are now issuing mortgages, but with high interest rates that result in high defaults rates and auctioning of houses by financial institutions to recover their funds.
