Semi-Govt bank to provide more housing loans in Myanmar
Semi-Govt bank to provide more housing loans in Myanmar
Eleven Myanmar, 02 Jul 2017
URL: http://www.elevenmyanmar.com/business/10357
Construction and housing development bank (CHDB), a property-focused lender under a public-private partnership scheme, has planned to open more housing saving accounts and provide loans to low-income people in Myanmar from this year onwards, according to its executives.
Hla Myo Tint, assistant manager at the bank’s Housing Mortgage Department, said more than 17,000 housing saving accounts have been opened so far and among them, over 3,000 people have been eligible to buy low cost housing and mid-range apartments implemented by the Construction Ministry’s Department of Urban and Housing Development and some construction companies.
“We have provided the housing loan to more than 1,400 people who want to buy an apartment. Now, more than 3,000 customers are waiting for more apartments to be finished so that they can purchase via their housing saving accounts,” he said.
Hla Myo Tint said it was a non-profit oriented initiative by the government to fulfill the housing need of middleclass and low-income families. The bank aims to support both construction businesses and the families.
He explained that those who wanted to buy some apartments could open a saving account at the bank and informed bank executives of their preferences with respect to location, price range, and width (e.g. square feet) of the apartment they wanted to buy. Once they have saved 30 per cent of the apartment price, they become eligible to buy it.
“People can buy a flat by making 30 per cent down payment. The remaining 70 per cent of the payment can be settled in 10 years. If they wish to, they can also settle the remaining payment within a few years. Now we are thinking of extending the loan period to 20-30 years, depending on the property price they have to settle,” he said.
He explained that no collateral was needed to request a housing loan but the bank would keep all the documents regarding the possession of the apartment until the borrower could settle the money he owes the bank.
The bank may provide the loan which has to be settled at least one-third of the borrower family’s income. It has also planned to reduce the interest rate over time, depending on the sources of fund it receives.
“Housing saving offers a great chance for low-income people. They can buy a house once their savings reach the down payment limitation. Meanwhile, they will also enjoy 8.5 per cent interest every year for the amount of money they save,” he said.
“For example, if one buys a low-cost apartment worth 10 million Kyats, he needs to pay only Ks3 million at the time of contract signing and then save only Ks100,000 at our bank every month. By paying an amount which is less than rental fee for a flat, he can own an apartment in less than a decade. How nice?” he questioned.
Hein Wai Naung, assistant manager at CHDB, said the bank needed more capital to fulfill the nation’s significant housing needs.
“Myanmar still has a huge demand for housing. The government can only support only 30 per cent of the nation’s need while private constructors have to fulfill the remaining 70 per cent,” he said.
According to Hein Wai Naung, the bank now has 10 branches in major cities including Yangon, Nay Pyi Taw, Mandalay, Mawlamyaing, Pathein and Magwe, and will expand to other cities soon.
As part of its strategy to promote its services and housing loans in cooperation with the Construction Ministry, the bank recently took part in the Housing and Lifestyle Expo 2017 held in Yangon in late June.
There, the bank could raise awareness about its activities to nearly 4,000 people and could open more than 100 housing accounts during the expo. The 3-day exhibition resulted in more than US$10 billion sales of finished and ongoing housing projects.
Hla Myo Tint, assistant manager at the bank’s Housing Mortgage Department, said more than 17,000 housing saving accounts have been opened so far and among them, over 3,000 people have been eligible to buy low cost housing and mid-range apartments implemented by the Construction Ministry’s Department of Urban and Housing Development and some construction companies.
“We have provided the housing loan to more than 1,400 people who want to buy an apartment. Now, more than 3,000 customers are waiting for more apartments to be finished so that they can purchase via their housing saving accounts,” he said.
Hla Myo Tint said it was a non-profit oriented initiative by the government to fulfill the housing need of middleclass and low-income families. The bank aims to support both construction businesses and the families.
He explained that those who wanted to buy some apartments could open a saving account at the bank and informed bank executives of their preferences with respect to location, price range, and width (e.g. square feet) of the apartment they wanted to buy. Once they have saved 30 per cent of the apartment price, they become eligible to buy it.
“People can buy a flat by making 30 per cent down payment. The remaining 70 per cent of the payment can be settled in 10 years. If they wish to, they can also settle the remaining payment within a few years. Now we are thinking of extending the loan period to 20-30 years, depending on the property price they have to settle,” he said.
He explained that no collateral was needed to request a housing loan but the bank would keep all the documents regarding the possession of the apartment until the borrower could settle the money he owes the bank.
The bank may provide the loan which has to be settled at least one-third of the borrower family’s income. It has also planned to reduce the interest rate over time, depending on the sources of fund it receives.
“Housing saving offers a great chance for low-income people. They can buy a house once their savings reach the down payment limitation. Meanwhile, they will also enjoy 8.5 per cent interest every year for the amount of money they save,” he said.
“For example, if one buys a low-cost apartment worth 10 million Kyats, he needs to pay only Ks3 million at the time of contract signing and then save only Ks100,000 at our bank every month. By paying an amount which is less than rental fee for a flat, he can own an apartment in less than a decade. How nice?” he questioned.
Hein Wai Naung, assistant manager at CHDB, said the bank needed more capital to fulfill the nation’s significant housing needs.
“Myanmar still has a huge demand for housing. The government can only support only 30 per cent of the nation’s need while private constructors have to fulfill the remaining 70 per cent,” he said.
According to Hein Wai Naung, the bank now has 10 branches in major cities including Yangon, Nay Pyi Taw, Mandalay, Mawlamyaing, Pathein and Magwe, and will expand to other cities soon.
As part of its strategy to promote its services and housing loans in cooperation with the Construction Ministry, the bank recently took part in the Housing and Lifestyle Expo 2017 held in Yangon in late June.
There, the bank could raise awareness about its activities to nearly 4,000 people and could open more than 100 housing accounts during the expo. The 3-day exhibition resulted in more than US$10 billion sales of finished and ongoing housing projects.