The Government of Rwanda targets to increase urbanization rate from 18% to 35% in 2024 to support economic growth.
While Kigali hosts about half of the urban population in Rwanda, a Housing Market Study for Kigali (2012-22) estimates that total housing needs (2012-22) reach 458,256 units, of which 344,068 are to be constructed.
The demand for affordable housing has not been thoroughly researched countrywide yet studies are in preparation where it is estimated to double the total need in Kigali.
This stresses the need to bridge the gap between housing demand and supply for people in low and middle-income segments and high end users.
It also challenges city planners, developers, and banks to seek new approaches to encourage investors to fund housing projects.
Despite existing constraints in housing finance, lending conditions have improved through the introduction of longer credit terms slightly reducing interest rates, a larger and more accessible variety in terms of down-payment options among others.
Ecobank is among other banks that have not been left behind tackling financial issues restraining people with a quest to invest in housing.
With various loan products to support people’s ambitions to grow their finances, the lender added mortgage loan to existing products to keep walking together with clients in their businesses.
Ecobank’s Mortgage Loan finances the borrower’s residential house purchase or renovation.
Every aspect of this loan has been designed to help clients realize their dreams to own homes.
IGIHE has caught up with Olivier Mpenzi, the Head of Personal & Direct Banking at Ecobank Rwanda Plc to speak more about the product promising to turn clients’ dreams into reality.
In which context Ecobank introduced the mortgage loan?
When you buy a home or refinance your mortgages, it’s a big financial decision. By introducing the mortgage loan product, we wanted salaried and self-employed customers to own a house and this will help them to make large purchases.
What are key features?
Below are features of the mortgage loan facility:
1. Outright Property Purchase
This variant of the product provides financing for salary account holders to buy completed properties for residential purposes. It helps our customers achieve their dreams of becoming homeowners.
2. Equity Release
This is the opportunity for homeowners to have a portion of the value of their properties released to them as cash in other to meet other financial needs.
This provides homeowners the opportunity to have access to substantial cash with which they can renovate and upgrade their homes to their required taste; thereby increase the value of the property and the collateral coverage on the loan.
4. Estate development
This provides opportunity for customers to acquire properties within Estate. The property may also be semi-finished or where payment may be made based on agreed milestone. This also include where individuals come together for the purpose of creating a private Estate.
What are the unique benefits the borrower receives with Ecobank mortgage loan?
Affordable interest rate, annual management fees has been waved, dedicated relationship manager and other added services like, digital tools for customers to be transacting at any time, our goal is to help our customers to stay closely connected from anywhere in the world.
Which documents required applying for Ecobank mortgage loan?
A mortgage loan is one of offered loan products. When applying for a mortgage, one has to be an existing client channeling his/her salary to Ecobank. Once your salary domiciliation letter is provided to us other administrative documents are very easy to get.
How much is the monthly payment?
There are many factors taken into consideration while determining mortgage loan payment but we cannot exceed 50% of monthly salary as the maximum repayment capacity.
It also aligns with the regulations the Central Bank’s regulations whereby total monthly payments and other consumer financing does not exceed 50% of the net disposable income.
Do you require an inspection to qualify for this mortgage loan?
A home is a big investment. The bank will require a valuation report before they decide to finance or to service that loan. Because it’s very important to know about the conditions of the house you’re about to purchase if is in good condition or not in order to mitigate the risk. A valuer will look at the structure of the house and confirm that there are no major issues with the house. Once we have a better picture of the house’s condition, we proceed with the next step.
Are there pre-payment penalties with this loan?
At Ecobank, we don’t charge any fees for early repayment. Our purpose is not to penalize our clients. As long as you have that capacity to pay loan before, you will liquidate it without penalties.
Besides, you can complete transactions using our online service (Ecobank Online) without necessity for physical presence at the bank’s offices. This is how Ecobank is taking the lead to digitize even more complex processes by tapping into the advantage of digital technology.
What is your message to existing and potential clients?
First of all, a decision to have or purchase your dream home is one of the most important decisions you can make in your lifetime. I will strongly recommend everyone who doesn’t have a house to think about it and Ecobank will help you to achieve your dream.
Moreover, I encourage them to take advantage of our best loan products for retails meeting their banking needs like Personal Loans, Car Loan, Residential Mortgage Loans, Renovation or Land Purchase and Equity Release.