The Sunday Mail
The recent launch of the National Building Society by the National Social Security Authority has brought smiles and hope to many low-income Zimbabweans, most who could not find any solace in the obtaining dog-eat-dog mortgage environment.
The Sunday Mail Extra Editor Garikai Mazara sat down with the MD of the building society, Mr Ken Chitando, a day after the launch, and asked him:
Q: How has been the response so far?
A: I have just come from the newly-opened banking hall and the interest is encouraging. The amazing response could be because of the ever-present appetite for housing delivery in the country, as well as a result of the immense media campaign that we ran as we launched.
Q: Any indicative figures as to how many clients have opened accounts so far?A: I don’t have those figures as yet but the response has not just been encouraging, but overwhelming.
A: The response should be an indication of how anticipated such a product has been on the market, what took you so long in coming?
It has been a process. We started in 2014, getting the applications in, getting regulatory approval and making all the necessary refurbishments and structural improvements. It wasn’t an overnight thing. So we have been working on our product – and making sure when we hit the market, we would have got it right.
Q: Still, NSSA has been around for quite a long time and the expectation was that you should have moved into housing delivery a long time back. You seemed to concentrate on commercial properties at the expense of housing delivery, yet the bulk of your contributions come from people who need accommodation?
A: NSSA has a diverse footprint in the country’s financial services market with shareholding and investments in a number of banks, banks which in turn have building societies. So the thinking then was that the banks in which NSSA has the shareholding and interests would take a lead in the financing of housing delivery. When it was realised that the initiative was not being sufficiently addressed, a deliberate decision was made for the NBS to be born and be the dedicated vehicle for that process.
Q: You are coming into an environment that has seen a number of failed banks and the public’s confidence in the banking sector could be at an all-time low, how do you hope to regain that faith?
A: There has been a revision of the Banking Act and the robust corporate governance framework is being monitored and governed by the board of directors. Also the lessons learnt from the previous failings should be a guideline to any financial institution seeking relevance in today’s challenging environment.
Q: The economy has been hit by non-performing loans, shouldn’t that be scaring you?
A: The high incidence of non-performing loans is a factor of the economy as much as it is indicative of the cost of money in the country. There are plans underway to establish a Credit Reference Bureau and hopefully when it is up and running, it will help, not only us, but a number of us who seek to engage customers under such obligations.
Q: It has been widely reported that your interest rates will be as low as 9,5 percent, but on enquiry, it is a different scenario, with the interest rates as high as 12 percent?
A: We are using a risk-based pricing model, where the low risk borrowers will get financing at 9,5 percent; there will be cases where applicants depending on their individual risk profile will pay slightly higher than 9,5 percent.
Q: An informal worker in Muzarabani would be interested in accessing your services…
A: With time, we will roll out a limited number of branches but given emerging retail banking trends the world over we will have core physical branches supported by electronic channels and agencies. This year we will commence the agency journey through the use of existing NSSA offices countrywide which will give our customers sufficient access to our services.
Q: How affordable will be borrowing to this Muzarabani informal worker and in simpler terms, what does he need to do?
A: Our packages will be a reflection of one’s ability to pay but we have capped our limits at 40 percent of one’s earnings. If someone has a regular income, that income has to be reflected in our books for at least three months. For an informal worker, those earnings have to be reflected for at least three months as well, so that we are able to make a sound financial decision, which will be without prejudice either to us or our customer.
That one is salaried is not necessarily a guarantee that we will offer any borrowings as we will also vet his/her employer’s record, in terms of honouring salary obligations.
Q: Still that doesn’t sound any good to most low-income earners, given the way the macro-economic environment has been behaving?
A: As much as our primary focus is to assist those who have not been able to access funding elsewhere, especially first-time home-owners, we are dealing with depositors’ funds and we have an obligation to safeguard grow them. It is not like we are going to giving money just like that. We will follow sound credit lending practices. The capacity to repay also helps to create a pool of funds for further loan disbursements.
Q: Does that close the door to those who have homes already, and how tight is your screening that these are first-time owners?
A: We have a number of products on offer with a primary focus on mortgage financing off take from our developments. We will also assist those who own stands and have started the process of building their own homes.
Further, we will also finance home improvement loans and to a lesser extend out-right purchases in the secondary market. Where we need to ascertain first-time home-owners we will work with councils to vet applicants in the respective urban areas.
Q: The NSSA contributor, is there any special dispensation to NSSA contributors?
A: This initiative is intended to beneficiate NSSA members firstly through access to affordable and long tenure financing. The additional benefit will be in the form of an improved dividend at the end of the financial year thus growing the pension base for the benefit of the contributors.
Q: And the NSSA pensioner?
A: We are aware that there are many pensioners who are still economically active and there will be products for such a clientele base. Definitely we will offer loans at much lower than the prevailing 18 percent rate.
The recent launch of the National Building Society by the National Social Security Authority has brought smiles and hope to many low-income Zimbabweans, most who could not find any solace in the obtaining dog-eat-dog mortgage environment.
The Sunday Mail Extra Editor Garikai Mazara sat down with the MD of the building society, Mr Ken Chitando, a day after the launch, and asked him:
Q: How has been the response so far?
A: I have just come from the newly-opened banking hall and the interest is encouraging. The amazing response could be because of the ever-present appetite for housing delivery in the country, as well as a result of the immense media campaign that we ran as we launched.
Q: Any indicative figures as to how many clients have opened accounts so far?A: I don’t have those figures as yet but the response has not just been encouraging, but overwhelming.
A: The response should be an indication of how anticipated such a product has been on the market, what took you so long in coming?
It has been a process. We started in 2014, getting the applications in, getting regulatory approval and making all the necessary refurbishments and structural improvements. It wasn’t an overnight thing. So we have been working on our product – and making sure when we hit the market, we would have got it right.
Q: Still, NSSA has been around for quite a long time and the expectation was that you should have moved into housing delivery a long time back. You seemed to concentrate on commercial properties at the expense of housing delivery, yet the bulk of your contributions come from people who need accommodation?
A: NSSA has a diverse footprint in the country’s financial services market with shareholding and investments in a number of banks, banks which in turn have building societies. So the thinking then was that the banks in which NSSA has the shareholding and interests would take a lead in the financing of housing delivery. When it was realised that the initiative was not being sufficiently addressed, a deliberate decision was made for the NBS to be born and be the dedicated vehicle for that process.
Q: You are coming into an environment that has seen a number of failed banks and the public’s confidence in the banking sector could be at an all-time low, how do you hope to regain that faith?
A: There has been a revision of the Banking Act and the robust corporate governance framework is being monitored and governed by the board of directors. Also the lessons learnt from the previous failings should be a guideline to any financial institution seeking relevance in today’s challenging environment.
Q: The economy has been hit by non-performing loans, shouldn’t that be scaring you?
A: The high incidence of non-performing loans is a factor of the economy as much as it is indicative of the cost of money in the country. There are plans underway to establish a Credit Reference Bureau and hopefully when it is up and running, it will help, not only us, but a number of us who seek to engage customers under such obligations.
Q: It has been widely reported that your interest rates will be as low as 9,5 percent, but on enquiry, it is a different scenario, with the interest rates as high as 12 percent?
A: We are using a risk-based pricing model, where the low risk borrowers will get financing at 9,5 percent; there will be cases where applicants depending on their individual risk profile will pay slightly higher than 9,5 percent.
Q: An informal worker in Muzarabani would be interested in accessing your services…
A: With time, we will roll out a limited number of branches but given emerging retail banking trends the world over we will have core physical branches supported by electronic channels and agencies. This year we will commence the agency journey through the use of existing NSSA offices countrywide which will give our customers sufficient access to our services.
Q: How affordable will be borrowing to this Muzarabani informal worker and in simpler terms, what does he need to do?
A: Our packages will be a reflection of one’s ability to pay but we have capped our limits at 40 percent of one’s earnings. If someone has a regular income, that income has to be reflected in our books for at least three months. For an informal worker, those earnings have to be reflected for at least three months as well, so that we are able to make a sound financial decision, which will be without prejudice either to us or our customer.
That one is salaried is not necessarily a guarantee that we will offer any borrowings as we will also vet his/her employer’s record, in terms of honouring salary obligations.
Q: Still that doesn’t sound any good to most low-income earners, given the way the macro-economic environment has been behaving?
A: As much as our primary focus is to assist those who have not been able to access funding elsewhere, especially first-time home-owners, we are dealing with depositors’ funds and we have an obligation to safeguard grow them. It is not like we are going to giving money just like that. We will follow sound credit lending practices. The capacity to repay also helps to create a pool of funds for further loan disbursements.
Q: Does that close the door to those who have homes already, and how tight is your screening that these are first-time owners?
A: We have a number of products on offer with a primary focus on mortgage financing off take from our developments. We will also assist those who own stands and have started the process of building their own homes.
Further, we will also finance home improvement loans and to a lesser extend out-right purchases in the secondary market. Where we need to ascertain first-time home-owners we will work with councils to vet applicants in the respective urban areas.
Q: The NSSA contributor, is there any special dispensation to NSSA contributors?
A: This initiative is intended to beneficiate NSSA members firstly through access to affordable and long tenure financing. The additional benefit will be in the form of an improved dividend at the end of the financial year thus growing the pension base for the benefit of the contributors.
Q: And the NSSA pensioner?
A: We are aware that there are many pensioners who are still economically active and there will be products for such a clientele base. Definitely we will offer loans at much lower than the prevailing 18 percent rate.
Housing options on the market
FBC
Masotsha Ndlovu Cluster homes ($120 000),
Greendale Cluster Homes ($230 000)
Philadelphia Cluster Homes ($135 000)
25 percent deposit, $500-$800 per month instalments for 10 years
Mabvazuva
400 square metres cost $16 000
$4 000 deposit
$335 per month for five years
CABS
$25 000 for two rooms
$27 400 for two rooms with extra slab
$31 262 for four rooms
Stands are 300 square metres
10% percent deposit in CABS account. $360 per month for 20 years
South View Park (Fidelity)
Option One
Deposit $3 750 (dep payable over three months with initial dep of $1 000)
$140 per month over 120 months (10 years)
Or
$226 per month over 60 months (5 years)
Option Two
Deposit $5 750 (dep payable over three months with initial dep of $1 000)
$115 per month over 120 months (10 years)
$184 per month over 60 months (5 years)
National Building Society
To borrow $40 000 mortgage
Deposit 25 percent or if you have stand it acts as deposit
$550 per month over 20 years
This is based on an average salary of $1 000
ZB Building Society
Completed cluster homes in Hatfield
Cost is $120 000, $500 per month over 240 months (20 years), 300 square metre stands in Beitbridge, Cost $9 500
$100 per month
