Mortgage company, Ghana Home Loans has received approval from the Ghana Stock Exchange (GSE) to raise GHS 380,000,000 from the Ghana Alternative Market (GAX).
The fund, which will be generated over a period of three years is expected to boost the operations of the company.
Speaking to Citi Business News at launch of the listing, the Chief Executive Officer of Ghana Home Loans, Mr. Dominic Adu was optimistic there was enough liquidity in the market to meet the target over the three year period.
“I think it’s a very mature market and there is a lot more liquidity. Increasingly we felt that to have a sustainable business we needed to be able to raise the funds locally to make the local people stakeholders,” he said.
He explained that the company is seeking to raise an initial amount of US$5 million on the day of the launch after which it will raise the rest over the three year period.
Mr. Adu was of the view that, an opportunity to earn 8 percent on the investment will motivate investors to invest in the company.
“Our expectation is that it will be oversubscribed. If you look at the banking sector there is close to 3 billion or more of dollar assets sitting on the books of banks and the owners of those assets do not get any interest rates. Here is an opportunity for them to earn 8 percent fully secured on a property,” he stressed.
Touching on the general environment of the Ghanaian mortgage market, Mr. Adu stated that the market has improved over the years, attracting more companies.
“When we started in 2006 there was no credit bureaus, but now you can easily check peoples credit records. When we started there were nothing like Collateral Registry which allows you to register collateral from your office. So the environment is getting a lot better,” he said.
He, however stated that the challenge has been because of the lack of volume which has pushed away many people from the market.
Mr. Adu was optimistic that pressure may mount on price, forcing it to come down as international companies come into the country to engage in large projects.
He pointed out that high interest rates still impact negatively on the operations of the market, making mortgage prices higher.
“At interest rates of 23 percent you cant do a mortgage. If the interest rates are low the market will have affordable prices for Ghana’s mortgage market,” he said.
By: Lawrence Segbefia/citibusinessnews.com/Ghana