Banks which have been selected to undertake the government’s National Housing and Mortgage Finance initiative say they are expectant of the prospects of the program in bridging Ghana’s housing gap.
One of such banks, Republic Bank, believes its competitive rates should help to ease the burden of prospective homeowners.
The Finance Minister Ken Ofori-Atta in his mid-year budget review presentation to Parliament indicated that the new mortgage finance initiative is necessary considering the rising housing deficit.
The initiative comprises National Housing and Mortgage Scheme (NHMS) where three banks are expected to provide affordable credit for prospective homeowners from a pool of funds made available to them.
The second involves the government’s intervention in the Real Estate Investment Trust (REIT) which allows investors to channel monies into the building of facilities which will reap returns after they have been taken up by persons in need of the facilities.
Commenting on the selection, Mr. Antar lauded the move and outlined how Republic bank is working to help customers.
“We got ten million cedis and we are required to match it so there are a pool of twenty-million cedis to start with so depending on how well you go and how well you utilize the funds, there may be more funding to the bank or the various banks that were selected for the program. I believe that there is the same value for each bank but again it is a starting figure depending on your performance, it could be increased and we expect and plan to do well and more than twenty million cedis,” he explained.
He added, “There is a specific set of requirements both for the quality and size of the home and the capping terms I believe is around 140,000 cedis.”
The credit to the real estate sector adds to the improved returns that accrued to Republic bank for the first six months of this year.
Aside profit increasing by over 60 percent, the bank’s loans and advances for the period reached 1.29 billion cedis in 2019 from the 990 million cedis recorded for the same period last year.
The Republic Bank MD is confident the performance will be sustained for the rest of the year when activities in the mining and oil and gas sectors pick up.
Though the bank’s tax due National Fiscal Stabilisation Levy went up in the first half of this year compared to the same period last year, Mr. Antar would not readily give a definite position on calls for the tax to be scrapped despite the fact it exceeding the sunset clause given by the government.