Interest in Home ownership overwhelming : BSP

Interest in the First Home Ownership Scheme (FHOS) has been overwhelming, since the Government of Papua New Guinea (GoPNG) and Bank of South Pacific (BSP) inked the official agreement last year. To date, BSP has funded a total of 25 loans at an amount of K 8.4million. Most of these are in the NCD. At the moment BSP has over 800 loan applications that are going through processing for eligibility for loan.

The FHOS is a joint initiative between GoPNG and BSP, and provides access to all Papua New Guineans to flexible and affordable financial arrangements to enable them to own their own home.

BSP has confirmed that enquiries regarding the FHOS and requests for Home Loan applications have been overwhelming from right across the country, including Papua New Guineans working overseas. This is an indication of the level of interest in people owning their own home.

BSP believes that home ownership is a means for ordinary Papua New Guineans, employed in the public and private sector, to establish an asset base that can be passed onto their children.

Through the support of GoPNG steps are being taken to set up a long-term deposit base which addresses liquidity and market risks associated with long-term lending such as housing finance.  As a result of these actions, BSP will be able to provide housing loans to approved first home borrowers, over a 40 year term and at an interest rate of 4%pa.

While there are some conditions to the loans including a maximum loan amount of K400, 000, both the O'Neill - Dion Government and BSP believe that the FHOS will help address housing issues and offer wealth creation opportunities.

The FHOS is not a guarantee facility.  It is a product that will be offered by BSP adopting a commercial approach, albeit over a much longer loan term and at a somewhat concessional interest rate.

Both the GoPNG and BSP understands that having access to   serviced and  affordable land by Papua New Guineans is one of the major issues that hinders them from owning a home.

GoPNG through its Urbanisation Unit and National Planning Department are undertaking major infrastructure development of vacant state lands to make it available to many Papua New Guineans as possible.

Up to 3000 blocks will be processed and piloted outside Gerehu stage 3B. It is Government's objective to see that development of infrastructure on vacant state lands continues onto other major centres in the country.

BSP's involvement in the FHOS is another example of the Bank's approach to addressing the needs of Papua New Guineans.  Not only has BSP taken banking services to over 40 Branch and 44 rural sub branch locations, the Bank also continues to provide support for health, sporting, cultural and community initiatives through various sponsorships.

The Bank applauds the O'Neill- Dion Government for having the foresight in putting together the arrangements that would ensure Papua New Guineans have the opportunity to own their own homes and we am confident that Papua New Guineans will embrace this opportunity.