MANAGING Director of Citizens Bank, Mr. Eton Chester, has commended the Government for its massive housing drive and has welcomed the ceiling rise for low income mortgages.

He was addressing allottees last Thursday at the Ministry of Housing and Water, Brickdam, Georgetown, as he sought to explain the services offered by the bank and about the loan process.

Some 436 more applicants were allocated lots during a two-day exercise last Thursday and Friday, and selected their lot numbers by pulling of lots for Onderneeming Phase Two within Parfaite Harmonie Housing Scheme, West Bank Demerara, Region Three (Essequibo Islands/West Demerara).

The process is part of the Ministry’s “One Stop Shop” programme and Onderneeming Phase II has a total of 1,029 house lots of which 580 will be allocated in the first phase, and the lots for this phase are all low income lots costing $92,000 each.

Mr. Chester stated, “I want to compliment the Government and the Ministry of Finance for this very, very large or expansive housing drive.”

He reminded that the Bankers Association has come out in support of the Government, noting, “We have welcomed the Government’s change of increasing the low income ceiling to $8M from $3M.”

“Citizens Bank was the first financial institution to get onboard when the Government decided that they wanted the commercial banks to get involved in lending to low income earners, and we are proud to say that over the years, we have consistently supported the Government in that field,” he insisted.

The Bank official noted that Citizens Bank product is not dissimilar to what customers would enjoy at the New Building Society (NBS) and its low income product is based on a household income of a total of $70,000.

“In addition to that, the interest that you will be charged would not be the normal rate – the normal rate for a mortgage at a commercial bank is between nine and eleven per cent. With the low income at Citizens Bank, you will pay 4.95 per cent and let me add – it’s on the reducing balance,” he told the gathering.

He pointed out that the reducing balance simply means that customers benefit whenever a payment is made, adding, “At Citizens Bank, we want to assure you that we have your best interest at heart, and we ensure that we serve you well.”

Alluding to the increased ceiling to $8M, he disclosed that the interest rate that will apply will not be nine per cent but 6.95 per cent.

“It is an attractive rate because we want to support the Government and we want to encourage you to come in and to own your own homes,” Chester reiterated.

He committed that officers of the bank will be visiting the various communities in which house lots are being allocated to talk to allottees about the loan process.

“We are going to talk to you; we are going to take down your information; and I can assure you that by the time you get down to Citizens Bank, you would have known already whether your loan was approved or not,” he stated.

Minister of Housing and Water, Mr. Irfaan Ali, said the presence of Citizens Bank shows the level of ownership and interests that is demonstrated in housing, especially low income housing, by the private sector in the form of Citizens Bank and all the other banks.

Irfaan noted that his ministry has completed more than 10,000 interviews compared to a target of 2,500 this year, and has exceeded its target of allocating 1500 lots by almost 100 per cent to date.

He also disclosed the his ministry is moving forward with new developments in Tuschen and Zeelugt in Region Three, and are looking to expand development in Non Pariel on the East Coast of Demerara.

In a press release earlier this month, the Guyana Association of Bankers’ (GAB) had welcomed the Government’s move to raise the ceiling for low income mortgage loans.

GAB said that the successful opening up by Government of several areas for housing development has been driven by the strong demand from the lower income segment of the population, and lauded the Government for recognising that the cost of building a low income house has gone beyond the $3M limit set last July.

It was against this backdrop that the Government agreed to augment the facility for low income mortgage loans from those commercial banks that are approved mortgage lenders, and it means that persons who qualify for such borrowing will have greater access to mortgage financing nationwide, up to $8M, to build their houses at the low income mortgage rate offered only by New Building Society up to now.

“The Guyana Bankers Association lauds the Government for this initiative which reinforces the Government’s commitment to affordable housing of our people and to the contribution that housing development makes to national development.

“This is consistent with its members’ policies and in keeping with our task of intermediation for the benefit of national development,” the release stated.

GAB said it was informed of the Government’s decision at a meeting with President Bharrat Jagdeo, Finance Minister Dr Ashni Singh and Housing and Water Minister Mr. Irfaan Ali, and that it held frank discussions with the Government, as well, on its role in support of the housing drive.

The administration has been carrying out a number of interventions in an effort to advance housing development in Guyana, and Government has continued to work significantly on the infrastructural development in the various areas of development such as roads, drainage, irrigation systems, water and electricity.

Also, the ministry and the Central Housing and Planning Authority (CH&PA) had successfully launched its “One Stop Shop” programme to decentralise its services to people across the administrative regions, and also introduced an automated online application system to develop and enhance the information management system and provide overall support to its customers.

The ministry had even embarked on a process to interview ‘backlog applicants’ for 2008.