HARARE, March 15, (The Source) – Old Mutual Zimbabwe’s mortgage lender Central African Building Society (CABS) says it will soon launch a $6 million housing project in Bulawayo to develop 1,000 stands.
The group chief executive Jonas Mushosho told analysts on Wednesday that the Nkulumane housing project in Zimbabwe’s second largest city will be similar to the group’s Budiriro housing development scheme, under which 3,000 houses were built.
In Budiriro, two-roomed houses cost $22,000 while four roomed houses cost $27,000.
The Bulawayo project is part of its $62 million scheme to build 15,000 housing units over five year launched in December 2013.
“Due to the current economic difficulties, in Bulawayo we will service the land then pre-sale stands and give people options, either to get loans for building or for us to build for them. There will be greater flexibility just responding to people’s personal circumstances,” said Mushosho.
CABS managing director Simon Hammond said the mortgage lender was still finalising the project and servicing of stands will start in the next few months.
“We have not got to the stage of interest rates yet but it will be in line with what we did in Budiriro so probably 10 to 12 percent,” said Hammond.
Interest rates for the Budiriro housing development scheme started at 25 percent of the total cost, but were later reduced to 10 percent after slow uptake of the stands.
Zimbabwe has an estimated housing backlog of 1, 25 million.
Mushosho added that OMZ would launch its microfinance unit in April, after it was issued with non-deposit taking licence by the central bank.
He said the microfinance will offer loans at five percent interest rate per month.
“The money we will invest into the institution will depend on the demand. If the demand is there, we do have the capital and resources to be able to invest into the institution,”
“In terms of lending, there is going to be opportunities for salary based loans, small to medium enterprises loans and group lending,” said Mushosho.