Mortgage financing resumes in BCR

The Commercial Bank of Rwanda (BCR) has resumed mortgage financing after holding the product for about six months, a top official has revealed. The BCR’s Managing Director, Sanjeev Anand said that the financial product has been resumed selectively depending on the mortgage value.
Newly renovated BCR branch in Kigali City (File Photo)
Newly renovated BCR branch in Kigali City (File Photo)

The Commercial Bank of Rwanda (BCR) has resumed mortgage financing after holding the product for about six months, a top official has revealed.

The BCR’s Managing Director, Sanjeev Anand said that the financial product has been resumed selectively depending on the mortgage value.

“Doing it selectively doesn’t mean that we are facing liquidity problems. We just don’t want to get exposed to such by financing one product at the expense of the other,” he added in an interview with The Business Times.

“Some applications have been approved for financing and we are still the leaders in this programme,” Anand said.

The product had been suspended after the financial institution claimed to have exceeded its ceiling of Rwf2 billion by 50 percent.

The management of the Actis owned bank had earlier explained that the will continue financing mortgages subject to the bank’s overall portfolio.

This was a blow to many Rwandans who dreamt of owning houses. It also sent panic among real estate dealers since most of their sales are through mortgages.

Rwanda’s construction sector is largely financed by mortgages, though statistics from the Central Bank shows that the current demand for mortgage finance is much higher than its total supply. Only four out of eight commercial banks embrace mortgage financing alongside the Housing Bank of Rwanda (BHR).

Prices of houses have lately dropped by 20 percent, owing to lack of finance by buyers.

Charles Haba, the General Manager of Amani Holdings, a local real estate brokerage firm said that house owners are selling cheaply because they can hardly find any buyers.

It was also reported that commercial banks are facing liquidity problems, which is evident with a 24 percent decline in loans offered by June this year.

Official statistics by the Central Bank show that loans authorised by the banking sector dropped from Rwf94.4 billion in the first half of 2008 to Rwf71.7 billion in same period this year.

BCR is regarded as the pioneer of mortgages in 2008 considers the product a success with satisfactory Non Performing Loans (NPLs).

It brags of having mortgage value covering over 150 clients across all income groups.

However, the 20 percent government owned bank registered a 50 percent fall in pre-tax profits.

According to the BCR’s financial report, the bank’s net profits fall from Rwf3.1 billion in the previous year to Rwf897 million in 2008.

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