NSB housing loans to help low income earners

by L. S. A. Wedaarachchi

The National Savings Bank (NSB) has implemented a housing loan scheme which is designed for low income earning groups. Under this scheme only the interest is recovered for the first five years and the borrower does not repay even a part of the capital during this period.

NSB chairman K. D. Upali Gunaratna said that the "Mihindu Sevana" housing loan scheme offers the most attractive rates for housing construction. "Our goal is to empower every Sri Lankan to build and own a house. Since the "Mihindu Sevana" loan scheme requires that only the interest for the first five years be paid it enables low income earners and other income sectors to obtain loans and build houses without any hardship", he said.

The NSB provided Rs. 2.41 billion to state employees at concessionary rates last year.

Its housing loans portfolio increased from Rs. 11.18 billion in 2005 to Rs. 16.10 billion in 2006. Explaining the importance of remittances by Sri Lankans working abroad, the chairman said that over Rs. 225 billion or US $ 2.2 billion is remitted annually by Sri Lankans.

"Only half of the remittances by Sri Lankans working abroad comes through unofficial channels. The bank is committed to help the 1.5 million Sri Lankans working abroad and the NSB remittance schemes have been designed to provide a secure and speedy transfer of funds between countries, he said.

"We have linked our remittance facility with our housing products and account holders who remit money through the NSB for six months become eligible for NSB's housing loans at special rates of interest, he said.

The NSB tied up with the ICICI Bank, India's second largest bank to offer money transfer services to Sri Lankan migrants. Through this partnership ICICI Bank provides an easier alternative to the Sri Lankan migrants worldwide to transfer money to their families back home using the ICICI Bank's international reach and NSB's wide network in Sri Lanka.

[email protected]