Reduction in interest rates:

Demand for housing loans increases

by Lalin FERNANDOPULLE

The demand for housing loans has increased sharply following the Central Bank’s decision to slash interest rates on lending, said Chairman HDFC Bank, Siromi Wickramasinghe.

She said the reduction in lending (interest) rates would help low and middle income families to obtain housing loans and improve their living standards.

“The bank will reduce interest on lending considering the area of the borrower to reduce the disparity in development. Development has been confined to the Western province with less focus on regional growth”, Wickramasinghe said.

HDFC Bank has planned to impose 12 percent interest from customers in the Moneragala district which is one of the poorest districts in the country. The bank will reduce the lending (interest) rates for less developed regions in the country.

“The demand for housing loans in the North and the East has increased with the resettlement and reconstruction taking place in the region. HDFC is keen to be a part of the development of the regions”, Wickramasinghe said.

Housing finance development plays a significant role in boosting equitable economic growth and reducing poverty by helping households to build assets.

“It is the wish of everyone to own a house but due to less access to funds it is yet a dream for many.

The HDFC Bank has been a mediator to those who have no access to capital to obtain a loan and build their house”, she said.

The Central Bank has directed banks to reduce the lending rates to 14 percent to promote investment and development in the country.

“Improving access to houses will help reduce the number of slum dwellers, increase savings, generate employment and improve the quality of life”, Wickramasinghe said.

HDFC Bank with over 25 branches and 100 mobile operators islanwide caters to the housing industry, a vital sector of the economy of the country.

Wickramasinghe said that the bank has gone beyond being a loan provider to promote sustainable housing in the country. The bank’s technical and valuation officers help in planning and building houses.

“The way the house is planned and built has an influence on the education of children, health, domestic peace, savings and family economy”, she said.

Wickramasinghe said the bank plans to accelerate growth in lending, increase the number of branches and bank mobile operators.

The bank provides loans to housing and condominium apartment developers to promote better housing and reduce slums and large scale projects such as condominiums.

Over the past two decades there has been a vibrant growth in the national housing stock and home ownership in Sri Lanka. The national housing stock has grown from 3.9 million to 4.7 million houses of which a substantial percentage of the development has been fuelled by the banking sector.

Kedella, Shrama Udana, Sirisara, Guru Sevana, Situ Sevana are the home loans of the bank.

HDFC Bank has been in operation for over 25 years dealing with housing and housing related transactions. The bank has over 125,000 borrowers.