24 October 2014
   
New Zimbabwe Header
7,000 to attend MDC-T congress, Chamisa
Mujuru 'formed' Marange owner ACR
Zanu PF headed for devastating split
Resign or else, Grace tells VP Mujuru
Youth development fund looted: Nhema
Binga man axes 'witch' uncle, hangs self
Get rid of ‘ghost workers’, says IMF
Zim misses out as SADC booms
MORE NEWS
Restore confidence, IMF tells govt
Econet H1 profits down 30pc to US$50m
MORE BUSINESS
Fast and Furious star slams gay claims
TKay Maidza blows hot in Australia
MORE SHOWBIZ
Warriors tumble in Fifa rankings
Quincy Antipas a hit in Denmark
MORE SPORTS
Makanaka: Mazara ignorance and an apology
Ebola scourge: Wake up call for Africa
MORE OPINION
 
Libya: The tragedy of western intervention
Ministers: Technical competence or political value
MORE COLUMNISTS
 
 
CABS resumes long-term mortgage lending
10/08/2010 00:00:00
by Victoria Mtomba
 
 
RELATED STORIES
RBZ, banks reach rates, charges deal
RBZ closes two troubled banks
Bank deposits up 21 percent
Indigenous banks: patriotism versus safety
Trust Bank must pay Shah US$1.5mln
Biti accuses banks of 'stealing'
Gono warns banks over indigenisation
Trust Bank to re-open branches

CABS, Zimbabwe’s largest mortgage lender, has re-introduced long-term mortgage lending, which had been suspended in 2008 when the country’s hyper-inflation eroded both interest income and loanable savings.

Kevin Terry, managing director for CABS, said the mortgages would initially be limited to low-cost housing development until the institution’s loan book expands.

“The funds are sourced entirely from customer deposits at present, although we are looking in the international markets for additional funds,” Terry said. “We are working on low-cost housing, which would deliver completed units in the way that we have done in the past.”

So far, the institution has disbursed $9,7 million in mortgage bonds.

The bonds have a tenure of up to 10 years, accruing interest at a rate of 15% per annum.

Eligible borrowers are required to pay 25% of their monthly gross income to service the loans.

Terry said the building society would expand the mortgage facility to medium and low-density housing, in line with the rate of growth in its loan book.

Like any other lender, CABS says its biggest hurdle is one – a low deposit base dominated by hot cash.

“This is why we are looking in the international markets for additional funds,” Terry said.

CABS hopes to ride on Zimbabwe’s adverse country risk with a strong credit rating, backed by its parent, Old Mutual Zimbabwe, the largest life assurance organisation in the country.

But this option would significantly increase the cost of funding and bid up interest rates beyond 15%.

CABS says it has also engaged various local authorities in the country and other stakeholders to establish a partnership for housing development.

Zimbabwe has endured a protracted mortgage stress that set in at the turn of the decade when savings started dropping steeply, aggravating over the years and eventually slumping in 2008, the country’s all-time bottom. - NewsDay



Advertisement


 
Email this to a friend Printable Version Discuss This Story
Share this article:

Digg it

Del.icio.us

Reddit

Newsvine

Nowpublic

Stumbleupon

Face Book

Myspace

Fark
 
 
 
comments powered by Disqus
 
RSS NewsTicker