BSP funds about 1,000 homes through scheme

The National Business

By CLARISSA MOI
THE Bank South Pacific (BSP) has lent almost 1,000 first home ownership loans totalling K300 million since the product was introduced, chief executive officer Robin Fleming says.
He said that despite the Government not providing the funding support, the bank allocated some of its other low cost deposits to this product from a liquidity and interest rate management perspective.
“To qualify for the product it must be the customers first home, the home must be new: built within the last 12 months, and must be able to meet normal serviceability requirements,” Fleming said.
“For an average loan of K400,000 over 30 years the repayments would be K2,000 per month approximately.”
Fleming previously told The National that the scheme’s loan repayment depend on the support that the employees received from their employers such as housing allowance that made it easier for individuals to make repayments.
The scheme is a partnership between the Government and the bank which began in 2014 to create a pathway for Papua New Guineans to have access to specially structured loans to acquire their first home.
Other requirement include being a PNG citizen and first home buyer, provide proof of 10 per cent equity, be an employee of either public or private sector and earning a regular income.

7 comments

  • His example shows repayments of K720000 over the 30 year term. Very nice for the bank.
    How many PNG workers have a K30000 deposit and then K2000 to pay for that sort of loan after spending wages on food, clothing, transport, education fees, medical fees
    PNG Minimum wage is K3.20 for a 35 hr week that is K112 or K485 per month or K5824 a year.
    Adequate housing is a right of all PNG citizens and over 45 years their governments have denied this to their workers. Without cleaners the rich would have no private hospital for their health needs. There would be no flashy hotels, cafes, etc which cannot function without the workers who do the dirty menial or basic tasks that allow the nation to function.
    Happy anniversary to the past and present dwellers in Waigani. Perhaps someone could calculate the value of PNG exports since 1975 and tell the people where the hundreds of billion went.

  • Robin Fleming and BSP are totally ripping off the customers. K2,000.00 monthly loan repayment is just ridiculous. This is not for the ordinary citizen workers.

    Arthur’s basic calculation above tells it all.
    In 30 years, you would pay back a whopping K720,000.00.
    That is initial K400,000.00 plus 56 percent interest.
    In 10 years you would have paid back K240,000.00.
    What if you loose your job and you are not able to continue with the monthly K2,000.00 repayment after 10 years?
    The bank will still repossess your house and you will still lose the K240,000.00

    Now you see how cunningly devised this arrangement is.

  • BSP is reaping for the people, I dont think the bank already built 1,000 houses, this is not true figure, just want to promote its product. its not difference you build your own house from your savings. If you build from your savings than it would less then this scheme. What a joke BSP??

  • 30 years is not a fixed term of repayment but it can take less years to repay the loan.. 30 years is cut off period set to settle the loan for housing scheme.. Correct me if I am wrong.. Seek more information from BSP lending officers but as for one, I believe it is a good scheme set up to have your own home because it is very expensive to buy one.. Its worth taking risk and play around the corner to pay off the debt..

  • Government need to intervene in this housing loan scheme. We need a cheaper housing scheme that is cheaper, affordable and fair across the board. Current bsp housing only benefits bank workers and need to be reviewed

  • I know BSP standard home loan equity is 20%. Under the FHOS, the government covers the 10%. the equity contribution must be taken out from the loan amount so that the customer will only service the 80% of the debt provided they pay their own 10% equity.

    If a house is going for K400,000, GoPNG pays 10% (K40,000), the borrower pays 10% (another K40,000). So the acutal loan amount that the borrower is required to service over 40 years should have been K320,000.00. However thats not the case as borrowers are paying K360,000.00 thats 90% of the loan amount.

  • Landowners of resource province should start a bank that can help our people. All the banks in PNG are interested only in how much money they can extract out of every PNG CITIZENS without any care in the world.
    No customer Care
    High Loan Rates
    High Service Rates
    and more .
    We the people of PNG should start a bank if no one can help, a bank for the poor PNG citizen and big corporates that a willing to help our people.

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