Rwanda Commercial Bank (BCR) mortgage financing will be launched next month, paving the way for many Rwandans without sufficient funds to own modern homes.
The bank is to inject Frw3b to finance the mortgages, a move that may see between 80-100 houses built countrywide. The houses will address the shortage of standard housing units in the country.
BCR’s investment in housing follows the discovery that only 20 per cent of houses in the country are planned, meaning 80 per cent of the structures could be categorised as illegal.
“This is not desirable. As much as possible, people should live in houses that are formally structured, formally built, safe and secured,” David Kuwana, BCR managing director, earlier said.
If the project is successful Rwanda will see an increase in modern housing units valued at between Frw20m-40m. The houses will be paid for over a 15 year period with an interest rate of 14 per cent per annum.
The bank has two products: one for ordinary Rwandans in Rwanda, and another for Rwandans living abroad. By press time, records in the bank indicated, that 50 Rwandans living abroad have shown interest in the mortgages.
“We are in discussion with the diaspora community about the product. The response has been very positive. And we have already started opening dollar accounts,” Kuwana said.
With the mortgage product, individuals can borrow money from BCR for constructing, buying or extending a house.
The house is the security for obtaining the money from the bank. Those who are account holders with BCR and who have a salary are eligible to apply for a mortgage. Those who are currently building homes financed by BCR will also be entitled to apply for a mortgage.
BCR management said customers will have to pay a deposit of 30 per cent of the total cost in order to qualify for a mortgage.