With the increasing demand for home ownership in Guyana, the government and Bank of Baroda Guyana Inc. have signed an agreement for persons to acquire loans without the hustle and with low interest rates.
The agreement was signed at the Arthur Chung Conference Center, Greater Georgetown under section 15 of the Income Tax Act, Cap. 18:01 of the Laws of Guyana on Wednesday now designates Bank of Baroda as a mortgage finance company.
The agreement paves the way for persons in the low-income and middle-income groups to have easier access to loans for the construction of their own homes.
The Bank’s Managing Director, Arun Kumar Gupta praised the government for expeditiously granting the approval for the finance company.
He explained that the agreement states that the rates being granted should not be more than what is being offered at the New Building Society Ltd (NBS). For loans granted up to $6 million the interest rate will be four per cent, loans from $6-12 million will have an interest rate of 5.9 per cent while loans from $12-15 million will have a 6.25 per cent interest rate.
“The government of Guyana in order to support the development of the housing sector, they are foregoing their interest in the tax income so, it is basically a sacrifice by the government of Guyana to help the common Guyanese people own better house and construct better housing accommodation for themselves,” the Managing Director explained.
The agreement signed on Wednesday comes a week after the New Building Society announced that it will further reduce its interest rates on mortgages. Additionally, the Housing Ministry recently signed contracts totaling $13.9B to commence a series of infrastructural projects and the construction of some 290 homes in the first quarter of 2021.
According to Minister of Housing and Water, Collin Croal the agreement forms part of the government’s aim to help citizens own their own homes. The Minister said is it expected that a demand for loans in the sector will also increase with the plan to deliver 50,000 house lots over the next five years.
The Minister also urged other financial institutions to get on board as competition will only guarantee better service delivery.
“When our government invests in the housing sector, there is an obvious direct effect on jobs in the construction, retail, and even services sectors,” Minister Croal stated.
Meanwhile, Senior Minister with responsibility for Finance, Dr Ashni Singh further reiterated steps the government is taking for persons to acquire homes. He spoke about the government’s increase ceiling for mortgage relief and the reduction of taxes on construction and building materials.
Indian High Commissioner to Guyana, Dr K.J Srinivasa also attended the signing and highlighted India’s commitment to assisting in Guyana’s further development. The Bank of Baroda is also looking to expand its operation in Guyana by introducing new products and services.