Walter Nyamukondiwa Chinhoyi Bureau
The banking sector should offer favourable mortgage financing through reducing unjustifiably high interest rates to stimulate economic growth and help in clearing the 1,2 million housing backlog, a Cabinet minister has said.
Speaking at the official opening of the third National Building Society branch here on Wednesday, Public Service, Labour and Social Welfare Minister Cde Prisca Mupfumira said the banking sector was key in mopping up money circulating in the informal system.
“Unjustifiable high interest rates punish the banking public and fuel non-performing loans,” she said.
“Therefore, concerted efforts must be made within the banking sector to review the cost of money downwards and I am happy that NBS is leading the pack with lowest interest rates on mortgage finance in Zimbabwe.
“This will have an effect of making funds affordable, encourage more people to get mortgages and stimulate aggregate demand, which will have a ripple effect on the rest of the economy.”
NBS is offering mortgages at nine percent interest per annum against nearly 20 percent being offered by other banks.
Minister Mapfumira called for the full implementation of the National Financial Inclusion Strategy to harness the informal sector and the unbanked segment of society. This, she said, would create healthy competition within the banking sector for the benefit of the population.
Minister Mupfumira expressed optimism that NBS would be a trendsetter in bringing liquidity into the economy through offering services and products tailored for the informal market.
The NBS Chinhoyi branch is the third after Harare and Bulawayo branches.
NBS managing director Mr Ken Chitando said at least 700 houses would be built in Chinhoyi this year under a $15 million facility, while similar initiatives were under way in other parts of the country.