28 March 2017
   
New Zimbabwe Header
Barclays bank to quit Zimbabwe
RBZ urges citizens to switch to rand
Zuma orders FinMin back from trip
Anti-apartheid leader Kathrada dies, 87
Zanu PF youths torch sofas, make mock grave
MDC-T boots out Harare deputy mayor
MDC-T says yet to decide on 2018 polls
Workers at work just to steal pens, b/paper
MORE NEWS
Bimha lauds SI64, says more such laws soon
Agribank recovers to post $5m FY profit
MORE BUSINESS
Sulu in court over $1,6k maintenance row
London to host Miss Zimbabwe UK
MORE SHOWBIZ
Zifa says happy with Coach Mapeza
Mapeza satisfied with Zambia draw
MORE SPORTS
Mujuru must shape up or ship out
Biometric vote (BVR): Dispelling the Myths
MORE OPINION
 
Zimbabweans, I heard you – Tsvangirai
Pastors should be servants not kings
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