— as Bank of Baroda approved as mortgage finance company

THE Bank of Baroda (Guyana) Inc. has been designated a mortgage finance company, a step that will see Guyanese desirous of owning their own home, now having greater access to financing to do so.

These were the sentiments shared by officials at a simple ceremony at the Arthur Chung Conference Centre, Liliendaal, East Coast Demerara, on Wednesday, to mark the occasion.

Senior Minister in the Office of the President with Responsibility for Finance, Dr Ashni Singh, addressing the occasion, explained that the development is an incremental step aimed at improving access to financing by Guyanese for the purposes of acquiring and/or constructing their own homes.

The minister highlighted that homeownership is a grand moment for individuals and noted that the Government of Guyana is committed to facilitating individuals owning their own homes, by creating the requisite conditions.

“Under the provisions of Section 15 of the Income Tax Act, the income earned by the bank on housing loans granted under this section and pursuant to an agreement signed by the bank will be exempted from Corporation Tax and what that does it enables the bank to lend at a lower interest rate,” Minister Singh explained.

This, along with other initiatives the government has already undertaken, will go a far way in allowing persons from low-income and middle-income brackets the opportunity to access financing to construct or acquire their own homes.

“The various elements taken by the government form the parts of a comprehensive policy agenda articulated by the Peoples Progressive Party Civic (PPP/C) Government with the objective of ensuring that Guyanese families can afford their own home, can afford to have access to a plot of land, can afford access to finances for the purposes of constructing their home and therefore can own, construct and occupy their own home,” Dr Singh said.

He noted that the government is desirous of the Bank of Baroda and similar institutions expanding their operations in Guyana and position themselves to take advantage of the remarkable growth prospects of the country.

“Not only are you providing an excellent service to your customers but indeed there is a remarkable opportunity for growth for the bank, you are a bank with a vast international network, and that gives you a unique position as it relates to international business,” Dr. Singh noted.

EXPAND YOUR PRESENCE

“We would like to see international companies like yours expand your presence in Guyana and expand the array of products that you offer and services that you offer to your customer and play a full role in the remarkable transformation that is on the verge of being unfolded in Guyana,” he added.

While delivering brief remarks at the ceremony, Minister of Housing and Water, Collin Croal, noted that the Bank of Baroda (Guyana) Inc. becoming an approved mortgage finance company will present significant benefits for Guyanese desirous of owning their own home.

He explained that the bank will now be an additional financial institution available for potential home owners to approach in seeking to secure a mortgage; the addition will also increase competition in the financial sector, a catalyst for development.

“The market is still missing a great deal of competition, we see competition in the financial market as a benefit to our prospective homeowners, with competition better service delivery and indeed cheaper and more affordable capital would become available,” Croal explained.

The Bank of Baroda has entered the market at an incremental stage of the Guyana’s development. Demand for mortgages is expected to increase tremendously due to the massive housing drive being undertaken by the Ministry of Housing and Water.

High Commissioner of India to Guyana, Dr. K. J. Srinivasa noted that the Government of India and the Government of Guyana have enjoyed a strong collaborative relationship throughout the years, and the approval of the Bank of Baroda signals the enlarging of that collaboration between the two countries.

“This occasion will lay the seeds for further collaboration in the financial sector and I can strongly emphasise that the expertise that the Indian financial institutions have in dealing with such matters will be very helpful,” he noted.

Speaking at the event, Managing Director of the Bank of Baroda (Guyana) Inc., Arun Gupta, extended appreciation to the Government of Guyana for granting approval for registering the Bank of Baroda as a mortgage finance company, which will enable the bank’s customers to access housing loans at low interest rates.

Pursuant to the approval, the loans are to be granted at the rates not more than what is being charged by the New Building Society. For loans up to $6 million, the interest rate will be four per cent; $6 to 12 million will attract an interest rate of 5.9 per cent while loans from $12 to 15 million will have a 6.25 per cent interest rate.

The Bank of Baroda (Guyana) Inc. is a subsidiary of the Bank of Baroda, India’s International Bank; they have a global presence with locations in 24 countries worldwide. Their Guyana branch was established on March 31, 1966 and in 2012 they expanded their operations by adding a branch at Mon Repos, East Coast Demerara.

Gupta noted that the company has intention of further expanding its operations in Guyana by adding more locations to its fleet as well as more products and services. The approval is a start of that process.

The People’s Progressive Party Civic in their 2020 Elections Manifesto committed to distributing some 50,000 house lots within their first five years in office, disaggregating this into 10,000 house lots per year.

In their first four months of office, the government has distributed some 3,600 house lots to applicants across Guyana. On Tuesday last, $13.8 billion in contracts were awarded to contractors to commence new infrastructural works, as well as for the construction of houses.