THE National Building Society (NBS) has allocated US$7 million investment towards new projects aimed at enhancing its services and promoting economic growth.
The investment, businessdigest understands, will be channeled into various initiatives, including housing development and branch expansion.
Recently, the society opened a new branch in Bindura, a strategic move to increase access to affordable financial products.
It also launched Lenderspark, a microfinance institution designed to promote financial inclusion and drive local economic growth.
“The value of our projects on the go is US$7 million. It includes the new branches as well as our housing projects, Glaudina in Harare, Newmara in Mutare and servicing of the Plumtree land bank,” NBS acting managing director Sifiso Mahlangu told businessdigest.
Mahlangu said the financial institution came up with affordable products, which included 'rent to buy'.
“What we have done is we have also not left the low income customers and also the informal sector. We have actually gone into that space and come up with a product that we call 'Rent to Buy',” he said.
“So, while people in other banks insist on having formal employment and formal payslips, what we basically say is, we give you a property, you go in there, you rent for, say a year.
- ‘Rate hike stems inflation storm’
- Corporate world pledges support for women soccer league
- Zanu PF ‘overruns’ NBS housing event
- NBS expands into corporate banking
Keep Reading
“Eventually, if we were to then give you a mortgage, will you be able to pay? So, you are creating a record as a result of your consistency and your ability to pay an agreed amount of rental. So, that is exactly how we have actually gone in to empower the informal sector.”
The bank plans to open a branch in Chiredzi within the next two months, targeting farmers.
“The competition there is not yet too much, but what we are targeting is the agricultural environment that is there. As a national bank again, over and above the reach that we want to create, we are not playing a full role in terms of the agricultural space,” he said.
“We do believe that if we go into the Lowveld, I think given the outdoor farmers arrangement we have seen within the sugar cane business, we should be able to also play a very significant role. We want to use that Chiredzi branch as our step into agricultural finance.”
He added: “We do believe that model yields more output in terms of housing than conventional mortgages. When it comes to funding; we are having very good support from the National Social Security Authority.
“Over and above that, we also tailor-made funding arrangements that are coming through from pension funds. While we concentrate on mortgages, we can also do a routine banking business. Our preference is normally to actually go into the land bank acquisition and the construction of the actual properties.”
