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NBS housing loans dwindle to 400 last year from 2012 high
Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh hands over the approval for NBS increased mortgage ceiling to Chairman of NBS, Floyd Mc Donald (fifth and sixth from left) in the presence of Ministers of Housing and Water, Collin Croal and Susan Rodrigues and Members of the Board of the NBS.
Kaieteur News – The New Building Society (NBS) over the past five years saw the number of new loans granted annually falling sharply to 400 by 2020, prompting government’s intervention, resulting in the institution now being able to lower its interest rates charged in addition to increasing its loan ceiling for low income housing.
The official approval was given to the domestic housing financial institution on Wednesday, during a simple ceremony held at the Arthur Chung Conference Centre (ACCC).
Senior Minister in the Office of the President with Responsibility for Finance, Dr. Ashni Singh, handed over the approval for an increased mortgage ceiling to NBS Chairman, Floyd McDonald.
According to Dr. Singh, the move comes as part of government’s implementation process of some of the Budget 2021 measures. It was noted that with this approval, the mortgage ceiling for the financial institution now moves to $15 Million. up from $12 Million, allowing for persons to acquire mortgages up to this higher amount.
The Senior Minister, while lauding the NBS for the important part they play in the facilitation of home loans, reminded that the Society has come a long way in terms of their loan offers to the public, recalling that in 1991, NBS granted only 125 new loans while by 2014, the Society had granted 896 new loans, having achieved an all-time high of 1,234 in 2012.
“President, Irfaan Ali’s Government, has repeated and reiterated since our assumption of office, our firm conviction that home ownership is perhaps the single most important achievement for almost every family, and that acquiring one’s own home will perhaps for many of us be the single most important investment we would make in our entire lives,”
Minister Singh in his presentation reiterated, “our commitment to promoting and facilitating home ownership is because we recognize how important home ownership is to the individual family, but we also recognize how important home ownership and home construction and construction activities are to the economy as a whole…the generation and creation of jobs, the generation of income …the improvement of livelihoods.”
In 1992, the NBS was offering loans at a rate of 18 percent per annum reflecting the state of the economy and the financial sector at the time, but that since then favourable government policies had facilitated a steady reduction of interest rates to the point where today the NBS is able to offer its low income loans at 4 percent.
Dr. Singh’s sentiments were echoed by his Cabinet colleague, Minister of Housing and Water, Collin Croal, who in his remarks said that the 2021 Budget measures are expected to significantly boost the housing sector.
“This signals from Government’s perspective our deep underlying intention of ensuring we bring greater relief to our home owners, potential borrowers but also… walking the walk,” Minister Croal added.
He noted that more persons would be able to access financing for home loans as well as be able to afford to build their homes with more choices available in terms of types of homes to be constructed, as he alluded to the other budgetary measures that would assist in this regard, especially the reduction of duty and zero-rating of specific construction material.
Croal posited that with the increase in the loan ceiling, it will not only allow for Government to achieve its overall goal of distributing 50,000 house-lots, but also encourage home ownership.
The NBS Chairman, McDonald, in his remarks to the gathering, noted that with NBS now able to offer further reduced interest rates to borrowers, the company will additionally now offer loans up to $6M at a rate of four percent per annum reduced from 4.25 percent. Loans between $6M and $12M will see the interest rate now being marked up at 5.95 percent down from 6.15 and 6.75 percent, while loans above $12M up to $15 M will be offered at a rate of 6.25 percent per annum.
“The Society is indeed appreciative of the improved ceiling approved by Government. We know that our collective efforts will redound to an improved standard of living for Guyanese,” the NBS Chairman added.
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