CHDB saving program draws over 3000 customers
AROUND 30 customers participating in Construction and Housing Development Bank’s (CHDB) Housing Saving Account program now have the requisite balance to give them priority in applying for low-cost housing, the bank’s managing director has said.
The state-owned lender started the program in August, which aims to reward dedicated savers with priority when allocating low-cost housing. Customers who manage to accrue a balance of K3 million for a down payment will be first in line when new apartments are sold, and are able to apply for a CHDB loan to cover the monthly payments.
Some 3350 savers have opened accounts since the program started, and around 30 have the K3 million balance that can be used as a down payment, said U Zaw Win, managing director of CHDB.
The Ministry of Construction, which set up CHDB, is planning to sell more than 1000 low-cost apartments, and CHDB is drawing up a list of customers who will be offered the units, U Zaw Win said.
CHDB started the Housing Saving Account program after earlier initiatives were unsuccessful. The bank attempted to lend to low-earners in a joint pilot project with the construction ministry aiming to help people buy K10 million apartments in the Shwe Lin Pan low-cost housing project. But it found that many borrowers struggled to pay back the loans.
“Some people had the K3 million down payment but couldn’t make the monthly K120,000 payments,” he said. “Others couldn’t make the down payment. Although many people wanted to buy the apartments, in reality they didn’t have the money. So we’ve opened the saving account [to encourage people to save up].”
CHDB will offer loans at 12 percent to people with a K3 million deposit, but who need to borrow to make the monthly payments. The bank is also still seeking low interest loans from foreign banks or international financial institutions that it could use to lower the rates on its own lending.
“But that has been difficult to get because foreign lenders are still considering and observing the condition of the country,” he said. “Also CHDB bank was only established two years ago.”
New CHDB customer Ma Hnin Nu said that she likes the program. In the past savers still had little chance of buying a house, but now she hopes that one day, when her balance hits K3 million, she can buy her own apartment.
“I save a little money in each month to buy an apartment – it’s better than not saving anything,” she said.