POSB starts offering mortgage loans
Martin Kadzere : Senior Business Reporter
THE People’s Own Savings Bank has started providing mortgage loans to individuals intending to buy a complete structure, build or purchase a residential stand, an official has said. “They have started accepting and processing applications,” an official at the bank said. The initial tenure is 10 years at 12 percent per annum and a customer is required to deposit 20 percent of the purchase price. Last year, POSB obtained a licence from the Reserve Bank to start a mortgage finance division to tap into the growing demand for housing.
“This (credit) product is in response to the growing demand for mortgage resulting from huge appetite by individuals to purchase or build a house and a residential stand.”
The growing demand for housing has seen demand for mortgages rising significantly over the past few years despite fairly high interest rates being charged by lenders.
With the coming of mortgage products becoming more available, on the market, analysts say the interest rates may start coming down.
“It appears like housing activity will continue to grow and the availability of mortgage loans will also increase. This may see the rates plunging,” said one analyst with a real estate agent.
Of late, however, many borrowers have lost their properties after failing to repay the loans.
Zimbabwe is faced with a huge housing backlog. The housing shortage, estimated at 1,25 million units, translates to a national backlog of five million people or 40 percent of total population.
The most available housing finance schemes have little incremental effect on the national housing stock as these are either exclusively packaged for a few targeted groups or are priced beyond the reach of the poor.
Under Zim-Asset, Zimbabwe’s economic blueprint running from 2013-18, Government intends to reduce housing backlog through the provision of serviced land, strengthen public private partnerships and adoption of new building technology.
As such, the Government recently launched a new housing scheme known as Own Your Own Home Scheme, which seeks to meet targets set under the blueprint. The scheme is expected to provide up to 300 000 serviced residential stands in the next three years.
POSB, established more than a decade ago and famously known for its “green books” is 100 percent owned by the Government through Finance Ministry and Economic Development. The bank has a total of 500 000 depositors geographically spread across the country.