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| Sunday, 22 December 2002 |
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| News Business Features Editorial
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Loans for low income groups The government sponsored affordable housing scheme to provide loans for low and middle income groups launched last week will be effective from January 1 2003. The initial capital of Rs 3 billion will be provided by the treasury to implement the loan scheme through Housing Development Finance Corporation (HDFC) which will be the facilitator of the scheme. Under this scheme anybody earning a monthly income between Rs 3000 and Rs 20,000 will be eligible to obtain maximum of Rs 500,000 as a loan with a one year grace period at an interest rate of 10.5 percent to purchase a house, construction, extension or purchase of a land. Loans could be repaid within 15 years depending on the age of the borrower. The treasury last week signed agreements with eight banks including Sampath Bank, NDB Housing Bank, Hatton National Bank, Ruhuna Development Bank, Rajarata Development Bank, Kandurata Development Bank, Wayamba Developent Banka and HDFC while they expect to sign more agreements to ensure the scheme has the widest possible reach. It is expected to build 10,000 houses during next year. A proposal of the budget 2003, it is keeping in line with the governments objective of providing affordable housing to the low and middle income and thereby relief to the masses while stimulating the construction industry, said Minister of Finance K.N. Choksy in whose presence the agreemenrts were signed. He said the demand for housing is increasing continuously but the supply did not keep up with the demand due to the ever increasing population, low income level, high land prices and the lack of low cost housing facilities. Therefore this he said is a solution to address the housing needs of the low and middle income groups while boosting the construction industry. |
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