Nedbank Zimbabwe to give out home loans

Nedbank Zimbabwe, a unit of South Africa's Nedbank group will not be venturing into housing development like other local financial institutions but will rather focus on providing financial instruments for its customers to become home owners.

Last year the financial institution rolled out funding facilities including 20 year loans aimed at augmenting home ownership in the country.

Nedbank Zimbabwe managing director Dr Charity Jinya said the financial institution is progressing its expertise as it moves up the ladder in terms of construction.

"Our focus as a bank has been on growing businesses and individuals, but in terms of housing development our focus has been initially to individuals to make sure people have houses.

"We have now moved to the commercial sector and we are not yet into housing development because we want to be experts at what we do and we are progressing our expertise as we move up the ladder in terms of construction," said Dr Jinya.

The bank in a bid to entice its clients also introduced equity release loans which are now unlocking opportunities for its clients while giving them the means to turn their dreams into reality.

Equity release is a means of retaining use of your house or other object which has capital value, while also obtaining a lump sum or a steady stream of income, using the value of the house.

With the Nedbank equity release loan, clients will get up to 30 percent of the value of their immovable properties.

This loan facility is insured through Old Mutual, and premiums will be factored in monthly instalments. The loan is accessible to clients whose properties are fully paid up, but where owners would like to access funding.

Nedbank's equity release loan attracts an interest rate of 15 percent per annum and does not require a deposit for one to access the loan.

Under this facility Nedbank clients can get a loan tenure of up to 10 years and this should be within the retirement age of 65 years.

Nedbank has also enhanced its product suite to include a home improvement loan for convenience and adding value to its clients.

The Nedbank home improvement loan is a facility for those who already own a property and would like to improve or modernise it.

The rise in the number of banks providing mortgages is due to the current economic constraints, namely meagre salaries, liquidity constraints, lack of lending from banks due to uncertain returns and high unemployment rate that have left little to none disposable income for individuals.

This also comes on the back of potential home-seekers being short-changed by co-operatives and land developers.

Mortgages act as a way to offer loans to the market after paying deposits and the balance of that being paid over-stipulated time while paying interest rates to the banks at an average of eight to 16 percent.