Maravi

Financial institutions reluctant to offer mortgages, says Miller

Financial institutions reluctant to offer mortgages, says Miller
By Florence Bupe
Friday June 08, 2007 [04:00]

LILAYI Development Holdings managing director Robin Miller has said the greatest challenge facing the estate industry in Zambia is financial engineering. In an interview, Miller said most investors were not willing to get into the real estate business because financial institutions were reluctant to offer mortgage services.

“The biggest problem in Zambia is that most people do not own assets because they do not have the finances to acquire property. Unfortunately, most business houses are not willing to venture into the real estate business because funding is scarce,” he said.

Lilayi Housing Development recently commenced first phase construction works for 3,700 housing units after receiving the first phase of funding totaling US $2 million out of US $5 million earmarked for the project.

The US $2 million will be used to mobilise the infrastructure contractor, Raven Worx Construction for the construction of roads and other facilitating structures.

Miller said it was imperative for investors and other economic development partners to aim at empowering individual Zambians and not just government as a whole.

“It would be more effective to empower individuals than channeling financial resources to government for disbursement,” Miller said. “Individual empowerment would ensure more sustainability as people will be able to own property in their own right.”

Miller expressed delight at the number of institutions that have shown willingness to get into housing unit construction.

“We were the first institution to offer such flexible mortgage facilities where you will be allowed to pay back over a period of 15 years once you make an initial payment of 20 per cent of the total cost of the housing unit. It is encouraging to see more organisations expressing willingness to venture into such projects,” said Miller.

And Standard Chartered Bank has said its newly introduced home ownership mortgage product is meant to help increase home ownership in the country.

In an interview, StanChart head of marketing Perry Siame said the home ownership product was targeted at individuals who are employed and could not easily afford to build or buy houses for cash.

“We offer people who are interested in getting a mortgage between K50 to K1 billion to give our clients a wide range of choices in the kinds of houses they could buy,” Siame said.

He said home ownership should be encouraged in Zambia as it helped to empower families. Siame said both clients and non-clients could access the home loans from Standard Chartered bank.

Labels: BANKING

posted by MrK @ 3:30 AM