As part of efforts to reduce the cost of financing mortgages, some banks have begun partnerships with real estate companies.
The move according to them will help sustain real estate companies as well as the mortgage industry.
This also follows the Bank of Ghana’s latest banking sector report showed that commercial banks decreased their percentage of loans for house purchases by some two percentage points in June 2017.
The figure dropped from eight to five percent between May and June 2017.
This came despite the increase in demand for loans for house purchases by households.
In an interview with Citi Business News, the Executive Director for Legal, Human Resource and Compliance at Ecobank, Morgan Fianko Asiedu was of the view that banks have reduced their loans for mortgages as a result of the inability of real estate companies to pay their loans promptly.
“The real estate companies build with the hope to sell, if they build and the public does not buy then there is no way they can sell and then the cost of credit is higher making it difficult for them to pay back loans.”
He however expressed optimism that partnerships between banks and real estate companies will address the situation.
“I think that the assurance that we give to both the buyers and the real estate people will help, so what we are doing is making our products available and providing financing so that if many more people are accessing our financing and buying the products, then the real estate owners are not going to have to lock up capital for so long.”
Mr Asiedu made these comments at the sidelines of the Ecobank Housing Fair.
The first edition of the Ecobank Housing Fair opened at the Aviation Social Centre in Accra on Thursday, September 7, 2017.
The fair forms part of the bank’s resolve to help in solving the country’s 1.7 million housing deficit.
The fair is in a series of measures by Ecobank Ghana to aid prospective clients with affordable housing services in the banking and finance industry.
The spanned Thursday, September 7, 2017 to Friday, September 8, 2017.
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By: Anita Arthur/citibusinessnews.com/Ghana