BANKS have warned that the success of the ambitious national civil servants housing scheme will, like that of its predecessor, the fast-track land reform, depend on recipients affording the requisite collateral to access loans.
By PAIDAMOYO MUZULU
Representatives of financial institutions made their conditions clear during Wednesday’s meeting between government and civil servants to hammer out the modalities of the 500 000 national housing scheme.
Financial institutions told the government that the loans to be extended to civil servants should be backed by title deeds.
“Land delivery system should be streamlined and for banks to participate they need security. That is key. There should be freehold title for single stands and sectional title for the flats. That area should be addressed at the time the deal is signed,” a representative from the banks said.
Permanent secretary in Local Government ministry George Mlilo acknowledged the challenge and said the government was going to engage the banks.
“We will have dialogue with the banks. We will clear with the banks because without the banks we cannot proceed. It’s a serious area. We will definitely get the banks to give us advice,” he said.
Economists have since 2000 warned that the nationalisation of all land except urban land has created dead capital as the land can no longer be easily traded.
Most of the civil servants’ houses will be built on State land and the process of giving out deeds to the beneficiaries is cumbersome as most of the beneficiaries have no resources to make a once-off full purchase of the land.
The government’s creative 99-year lease agreements have not been readily accepted by banks, who argue that the leases are not transferable or executable, thus, reducing their status as possible security of tenure.
Meanwhile, a Salary Service Bureau representative at the meeting said the department was working flat out to make sure that they would be able to pass on to creditors immediately all money they deduct from civil servants. In the past two years, some civil servants had their properties auctioned after money deducted from their salaries was not remitted to the creditors.