Myan­mar hous­ing bank hop­ing for in­ter­na­tional loans to fund lend­ing

The Myanmar Times - - Business - ZAY YAR LINN za­yarlinn@mm­times.com

THE Con­struc­tion and Hous­ing De­vel­op­ment Bank is hop­ing to se­cure low-in­ter­est loans from Ja­panese and Korean banks, which will al­low it to of­fer its own low-in­ter­est fi­nanc­ing schemes for Myan­mar home­buy­ers.

Manag­ing Di­rec­tor of Con­struc­tion and Hous­ing De­vel­op­ment Bank (CHDB) U Win Zaw told The Myan­mar Times yes­ter­day that talks were un­der way.

“There re­main a lot of pro­ce­dures to deal with. Both our bank and the [con­struc­tion] min­istry are try­ing to get loans. For the bank to ob­tain in­ter­na­tional loans, we need the en­dorse­ment from the min­istry,” he said. “For the time be­ing, we are dis­cussing with Ja­pan and Korea.”

The Min­istry of Con­struc­tion is a share­holder in CHDB, which was set up to pro­vide af­ford­able home loans.

As for which banks would be in­volved with any such deal, U Win Zaw re­mains tight-lipped. “We can’t yet say from which bank we would bor­row,” he said.

U Win Zaw added that the bank and the min­istry were dis­cussing the pos­si­bil­ity of govern­ment-to-govern­ment over­seas de­vel­op­ment as­sis­tance loans be­ing directed to CHDB. “If agreed, we will con­tinue to ex­tend loans to the pub­lic on a long-term ba­sis,” he said.

There are many pro­pos­als up for dis­cus­sion that would see loans pro­vided by in­ter­na­tional banks – par­tic­u­larly in order to ser­vice the hous­ing and con­struc­tion sec­tor, he said.

CHDB di­rec­tor U Tin Aung Myint told The Myan­mar Times ear­lier this month that the bank is push­ing the govern­ment to pro­vide a K30 bil­lion loan that would help fund low-cost hous­ing con­struc­tion and home loans.

CHDB is cur­rently work­ing to fa­cil­i­tate con­struc­tion and sales of af­ford­able hous­ing, in­clud­ing fi­nanc­ing op­tions such as long-term in­stal­ment plans and soft loans from state banks and in­ter­na­tional banks. The bank hopes to at­tract in­vestors to con­struc­tion and in­fra­struc­ture projects.

“We are try­ing to ex­tend long-term loans. The pol­icy has al­ready been sub­mit­ted to the state coun­sel­lor,” said CHDB vice chair U Tha Htay. “We can­not ex­tend 30-year loans based on tak­ing de­posits. But in­ter­na­tional hous­ing banks are now will­ing to ex­tend soft loans. Our bank will faith­fully bring those soft loans to the peo­ple. In­ter­est rate won’t be high. We are con­sid­er­ing tak­ing ser­vice charges only,” he said.

CHDB is cur­rently sell­ing af­ford­able apart­ments built by the Ur­ban and Hous­ing De­vel­op­ment Depart­ment to the pub­lic. This in­volves sign­ing on for a plan of 30 per­cent ini­tial pay­ment and 70pc on in­stal­ment over the next 10 years. Buy­ers must sub­mit ev­i­dence of earn­ings in ex­cess of K400,000 per month.

With the monthly av­er­age in­stal­ment at K120,000, low-in­come fam­i­lies still find it dif­fi­cult to buy af­ford­able hous­ing.

“To solve that prob­lem, we need govern­ment as­sis­tance and sup­port for long-term mort­gage loans which we can ex­tend up to 20 to 30 years. If we can get it, monthly pay­ment amounts will be largely re­duced,” U Tha Htay said.

– Trans­la­tion by Zaw Nyunt

Photo: Kyaw Phone Kyaw

Con­struc­tion and Hous­ing De­vel­op­ment Bank manag­ing di­rec­tor U Win Zaw sits in his Yan­gon of­fice

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