DFCC Vardhana Bank to fund housing sector
Around 80 percent of people do not have access to long-term housing
finance, said Asian Development Bank (ADB) country Director, Rita
O'Sullivan.
She said that general loans in Sri Lanka are short-term and added
that long-term loans are vital to fund the low income segment in the
country.
"Access to finance is a huge challenge in Sri Lanka.
Those in the low end do not default," said O'Sullivan.
She was speaking at a ceremony to sign an agreement between the ADB
and DFCC Bank for a credit facility of US $ 15 million.
This financing agreement is aimed at developing home ownership, a
cause strongly supported by the ADB, a media release from the Bank said.
The bank's strong performance over the past few years along with its
robust credit portfolio and widespread customer reach were some of the
main reasons behind ADB's decision to grant the facility to DVB.
The bank's national long-term rating which was recently re-affirmed
by Fitch as 'AA-(lka)' (stable outlook) with DVB's subordinated
debentures also rated at 'A+(lka)', too impacted positively on ADB's
decision to offer the Term Lending facility to DVB. The Bank recorded a
loan growth of 75 percent which was above the 43 percent increase in the
banking sector in 2011.
The facility granted to DVB is expected to be disbursed among young
entrepreneurs, first time home ownership by family units, self-employed
individuals and women borrowers.
It is stipulated that a quantum of the loans are to be specifically
granted to the areas in the North and the East affected by terrorism and
other parts in the South and the East of the country devastated by the
2004 tsunami. Five percent of the loans will be allocated to women
borrowers and single mothers and a minimum of 30 percent of the total
loan which converts to approximately Rs. 2 billion at the prevailing
exchange rate will also remain reserved for areas outside the Greater
Colombo Area including areas in the North and the East and tsunami
affected areas in the South and East.
CEO, DFCC Vardhana Bank, Lakshman Silva said, "DVB looks forward to
supporting all individuals who aspire to build their own homes and would
give preference to those who have been affected by either terrorism or
the tsunami in the North and the East in keeping with the ideals of the
Asian Development Bank. As a responsible institution we are very happy
to be part of this scheme which will give life to the dreams of many who
aspire to have a place of their own and be the catalyst in bringing joy
and stability to them as individuals while also being able to be a
partner in the country's economic resurgence."
The requirements for housing loans in the Northern and the Eastern
parts of Sri Lanka have steadily increased in the last three years.
|