Members of the NBS with Finance Minister Ashni Singh (fifth right).
GEORGETOWN, Guyana--The New Building Society Limited (NBS), already known for its low mortgage interest rates, on Wednesday announced a reduction in its interest rates – a measure that will likely bump up the number of new loans being granted.
During a brief ceremony at the Arthur Chung Conference Centre (ACCC), Finance Minister Ashni Singh handed over approval to raise the loan ceiling from GYD 12 million to GYD 15 million (US $57,539 to US $71,924). This measure will allow homeowners increased financing options when taking out a loan.
In his address to the gathering, Singh lauded the NBS’s commitment to reducing mortgage interest rates effective April 1. He recalled how the number of new homeowners applying for loans at NBS had plummeted after 2014.
“[NBS – Ed.] was giving approximately 1,000 home ownership loans when we were in office … In fact, I should make the point that, in 2014, our last year in office, NBS gave 896 new loans. In 2020, that number had fallen to 400. That tells a story,” Singh revealed.
“So, consider now, the Ministry of Housing rolls out their land distribution programme and 10,000 persons get their house lots this year. Let us say 1,000 of those persons come into NBS and they borrow on average GYD 10 million [US $47,950] loans. That is literally GYD 10 billion [US $47.95 million] of construction activity.”
According to Minister Singh, the new measures are likely to boost not only the construction sector, but the economy as a whole. He pointed out that material has to be purchased and labourers have to be employed.
Meanwhile, Chairman of the NBS, Floyd McDonald gave a breakdown of how the mortgage will be reduced. To begin with, low-income loans of up to GYD 6 million (US $28,770) will see the interest rates being reduced from 4.25 per cent to 4.0 per cent per annum.
When it comes to loans between GYD 6 million and GYD 12 million (US $28,770 and US $57,539), the interest rate will now be 5.95 per cent per annum, down from 6.15 and 6.75 per cent; while loans above GYD 12 million and up to GYD 15 million (US $71,924) will be offered at a rate of 6.25 per cent annually.
“The Society is indeed appreciative of the improved ceiling approved by government. We know that our collective efforts will redound to an improved standard of living for Guyanese,” the NBS chairman said.
One of the measures outlined in the 2021 budget had been the increase in the loan ceiling. It is one of several measures the government is pursuing in a bid to re-energise an economy stunned by the COVID-19 pandemic.
The measure also goes hand in hand with the government’s drive to deliver on its promise of 50,000 house lots within its five-year term. During the event, Housing Minister Collin Croal spoke of the impending signing of billions of dollars’ worth of contracts by his ministry for infrastructural works. He explained that the contracts are likely to be signed next week Tuesday, and will contribute to an influx of new homeowners.
“Already, NBS and other banks will significantly benefit from [the signing] less than a week from today [Tuesday, March 9]. We will be back here at the Conference Centre to sign a number of contracts to signal infrastructure work for commencement of a number of new areas for which allocations have been made,” Croal said.
“It means [that], potentially within another six months, you have about 8,000 persons who may be approaching you for mortgages. It means more accessibility for mortgages, for financing. But it also means materially that it creates more opportunities for the potential homeowner,” he added.
Since coming to office, the People’s Progressive Party (PPP) government has made it clear that it intends to fulfil its manifesto promise to distribute 50,000 house lots over the next five years. The government has allocated GYD 6 billion (US $28.77 million) for enhancing infrastructure in existing housing areas. A significant sum has also been set aside for improving water service and developing new wells. ~ iNews Guyana ~
