Potential home owners can now obtain low-interest loans through the Bank of Baroda (Guyana) Inc, which is now listed as a Mortgage Finance Company under the Laws of Guyana.
Senior Minister in the Office of the President with Responsibility for Finance Dr. Ashni Singh and Managing Director of Bank of Baroda (Guyana) Inc Arun Kumar Gupta signed an agreement to formalize the designation yesterday afternoon.
The designation was done under Section 15 of the Income Tax Act, Chapter 81:01 of the Laws of Guyana which allows for persons within the low and middle income groups to have easier access to loans to construct their own homes.
Mortgages up to $6M will attract a 4% interest rate while mortgages between $6M and 12M will carry an interest rate of 5.9%. For mortgages from $12M to $15M, there will be 6.25 % interest rate.
Gupta yesterday acknowledged the Government for the expeditious approval which he said will allow customers to access housing loans at low interest rates.
He described the move as a sacrifice by the Government in their effort to help citizens to acquire their own homes.
“The Government of Guyana in order to support the development of the housing sector, they are foregoing their interest in the tax income. So, it is basically a sacrifice by the Government of Guyana to help the common Guyanese people own better house and construct better housing accommodation for themselves,” Gupta said.
During his remarks, Minister of Housing and Water Collin Croal said that as the Government works towards delivering on its promise by providing 50,000 house lots by the end of 2025, the demand for mortgage financing will increase.
“This has a significant impact on our economic and housing sector and it signals the direction Guyana is moving in….We are living now in a society where quality of housing is instrumental…..in ensuring that the macroeconomic stability is maintained,” Croal said.
He explained that while Government is taking steps to increase the mortgage ceiling for low income borrowers, the market is still missing a great deal of competition. “We see competition in the financial market as a benefit to our prospective home owners. With competition, better service delivery and indeed cheaper and more affordable capital will become available,” he added.
According to Croal, low income loans make up a “significant” portion of the mortgage borrowing in the country. “But the delinquency rate is relatively low,” he said.
Therefore, he encouraged the Bank of Baroda to pay particular attention in this area as most of the persons being granted house lots and housing units fall into the low-income bracket.
Croal further stated that the Government will ensure that the existing backlog in persons seeking house lots will be eliminated. “Our combined efforts, over this next five years, we will ensure that we all eliminate the backlog in the Ministry system for those awaiting house lots,” he added.
Meanwhile, Singh said that the objective is to ensure that Guyanese families can afford their own homes… “Can afford to have access to a plot of land, can afford to access to financing for the purposes of constructing their home and they can therefore own, construct and occupy their own home,” Singh said.
He noted that the Government remains convinced that the acquisition of one’s own home is perhaps “the singular, biggest achievement for any family.”
For those who have not been able to take the necessary steps in acquiring their own home as yet, Singh encouraged them to do so now. “…This People’s Progressive Party Government would like to see you take that step. We encourage you to take that step and we will do all that we possibly can to create the conditions that are conducive to you being able to take that step,” he said.
High Commissioner of India to Guyana Dr. K.J. Srinivasa said that he believes the Government has recognized that the oil and gas sector cannot be the country’s only “engine of growth”.
He said with the upcoming growth in Guyana, now is the best time for anybody interested in getting their house lots. “Because once this Guyana growth story takes off, the cost of housing, the cost of land will obviously increase,” the High Commissioner said.
Just last Wednesday, the New Building Society announced a reduction in interest rates for mortgages. The announcement was made following formal approval of the lifting of the loans threshold from $12 million to $15 million which had been announced in Budget 2021.
On Tuesday, close to 200 contracts worth $14b were signed by the government for infrastructural works and the construction of houses at various areas across the country including Cummings Lodge, Prospect and Great Diamond.
