Minister of Finance Dr. Ashni Singh Saturday announced that Government had approved an increase in the ceiling on loans granted by approved mortgage finance companies for the purposes of low income housing.

Minister Singh indicated that the newly approved ceiling is $3 million, a 50 percent increase on the previously applicable ceiling of $2 million.

The decision, which takes effect from today, relates to loans granted under the low income housing programme that Government had established in 2001. Under the programme, participating licensed financial institutions that enter into an agreement with Government are mandated to allocate loans to finance housing development to individuals for the sole purpose of land purchase and home construction.

The loans are required to be secured on the same house for which the loan is granted and the land on which it is built.

Under the programme, Government grants certain specified incentives to licensed financial institutions participating in the programme.

Minister Singh indicated that since its introduction, the programme had demonstrated considerable success, with more than 1,300 low-income housing loans being granted under the facility at a total value of $2.8 billion.

This recent approval for the increased ceiling comes mere months after Government had also approved a 50 percent increase in the ceiling on housing loans granted by the New Building Society (NBS) from $8 million to $12 million, following which NBS had lowered its lending interest rates.

Minister Singh indicated that these interventions by Government are specifically designed to enable more Guyanese to be able to finance acquisition and construction of their own homes, recognizing the importance of home ownership to the quality of life enjoyed by citizens.

The Minister added that there continues to be a very visible construction boom in Guyana, particularly in the house construction sub-sector, reflecting a response to the Government’s immensely successful housing programme, as well as its financial sector policies aimed at promoting access to financing for home ownership.

In addition, he added that the construction sector is an important provider of employment to thousands of Guyanese, and increased construction activity therefore has important job creation and growth implications for the economy as a whole.