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The New Building Society has moved its housing loans ceiling from $12M to $15M following approval by the Government of Guyana.
The Ministry of Finance on Wednesday formally handed over the Mortgage Ceiling Increase Approval to the Bank at a ceremony held at the Arthur Chung Conference Centre.
Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh handed over the approval to Chairman of NBS, Mr. Floyd Mc Donald. The approval will see the ceiling for housing loans increase from $12 million to $15 million.
Chairman of the NBS Floyd McDonald said he was heartened by government’s approval of the increase in the ceiling, noting that as part of its corporate social responsibility, the Bank could now offer further reduced interest rates to borrowers. He announced that NBS will now offer loans up to $6M at a rate of 4 percent per annum reduced from 4.25 %. As regards to loans between $6M to $12M the interest rate will now be 5.95% down from 6.15 and 6.75% while loans above $12M up to $15 M will be offered at a rate of 6.25% 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.
Meanwhile, Dr Singh said government has repeated and reiterated its 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. “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,” Singh is quoted in a release by his office.
He lauded NBS for the important part they play in the facilitating home loans, while reminding that the Society has come a long way in terms of its 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. “Unfortunately, over the past five years, the number of new loans granted annually fell sharply to 400 by 2020.” He added that 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.
Meanwhile, Minister of Housing and Water Collin Croal 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. He 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.
