2 March 2014

Zimbabwe: CBZ Goes for Low - Cost Housing

CBZ Holdings will begin developing its US$66,7 million land bank into low-cost housing by June as the group moves to mitigate the nation's housing shortages.

Group chief executive officer, John Mangudya told Standardbusiness the land would be developed to be sold either as serviced stands or low-cost houses throughout the country.

"We have secured funding from Shelter Afrique for housing development. Also, our Cash Plus savings account has also mobilised funds for the purpose of developing shelter for individuals," Mangudya said.

Cumulatively, CBZ got US$16 million from Shelter Afrique earmarked for housing development.

Cash Plus is a term deposit savings account which does not incur charges but earns interest. At the end of the period, the account holder can borrow twice the amount deposited.

Mangudya said Cash Plus had managed to mobilise US$20 million and a third of the deposits were channelled towards housing.

"We have seen that customers are willing and able to save if there is purpose. It shows that funds are available if they are well-mobilised," Mangudya said.

Zimbabwe has a housing backlog of 1,5 million people, a third of which are in Harare.

According to the new economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic transformation (Zim Asset), government plans to construct 125 000 housing units by 2018.

This would be attained through the provision of housing stands, strengthening of public private sector partnerships and recapitalisation of the National Housing and National Guarantee Fund, among others.

Local banks are constrained to offer long-term loans or mortgages due to the highly transitory nature of deposits.

As a result, banks have gone offshore to seek medium to long term lines of credit for on lending to various sectors of the economy.

In the financial year ended December 31 2013, CBZ Group reported that it had mobilised US$290 million up from US$33 million in 2009.

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