Maputo, Mozambique — Two Mozambican private commercial banks Wednesday launched a mortgage scheme on the country's financial market.
The International Bank of Mozambique (BIM) and the Commercial Bank of Mozambique (BCM) announced plans to provide their customers with loans to purchase, build or rehabilitate houses.
The credits can be either in the Mozambican currency, the metical, or in US dollars.
The banks have made it clear that mortgage seekers will have to show robust financial capacity, enjoy good health and be of an age considered "safe" to access funds.
The loans can be repaid within five to 15 years, and the interest rate is pegged to the MAIBOR (Maputo Inter-Bank Offered Rate) for meticais, and to the LIBOR (London Inter-Bank Offered Rate) for dollars, on a spread of 90 days.
For MAIBOR the rate is currently about 27 percent, while LIBOR is running at about 12.5 percent.
The BIM/BCM mortgages will meet up to 80 percent of the cost of buying a house.
Meanwhile, the BCM board met on Tuesday to analyse the bank's balance sheet for the first quarter of 2001.
After two years of severe losses (the equivalent of 127 million dollars in 1999, and a further 27 million dollars in 2000), the bank is finally making some profits.
The figures released by the board show a profit of 5.3 billion meticais (282,000 dollars) in the first quarter.
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During the period the bank held 8,031 billion meticais (429 million US dollars) in assets, a 48 percent increase compared to the same period in 2000.
Credits increased by 469 billion meticais, so that by the end of March the total gross credit granted had reached 3,755 billion meticais (201 million dollars).
The BCM and BIM are the country's two largest banks. They share the same dominant shareholder, the Portuguese bank, the BCP, and the same chairman of the board, former Prime Minister Mario Machungo.
The state still holds 49 percent of the BCM's shares, and therefore had to provide 49 percent of the funds required to re-capitalise the bank after the disastrous 1999 results - this money (the equivalent of about 53 million dollars) was raised by issuing treasury bonds at 22 percent interest.
The government will doubtless be relieved that the BCM has finally turned the corner, and is beginning to show a modest profit.
The BCM is also showing some vigour in chasing its debtors. A Credit Recovery Directorate has started work with the aim of recovering the money lent so recklessly in the past.
