The National Government and Bank of South Pacific Ltd (BSP) officially signed agreements allowing the First Home Ownership Scheme to proceed.
The agreement was signed by Prime Minister Peter O’Neill and BSP Group CEO Robin Fleming at the State Function Room at Parliament, witnessed by members of the media, bank executives, cabinet ministers and departmental heads.
BSP Group CEO Robin Fleming when officiating today said the shortage of quality and affordable housing in Papua New Guinea (PNG) has been recognised by the Government of Papua New Guinea as having a fundamental impact on many Papua New Guineans.
“BSP believes that home ownership is a means for ordinary Papua New Guineans to establish an asset base that can be passed onto their children. So it is with pleasure that we here today with the Prime Minister to announce this joint initiative, the First Home Ownership Scheme,” he said.
Through the support of the National Government steps are being taken to establish 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.
Mr Fleming said while there are some conditions to the loans including a maximum loan amount of K400,000 both the National Government of Prime Minister O’Neill and BSP believe that the FHOS will help address housing issues and offer wealth creation opportunities for many Papua New Guineans.
He explained that 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. The availability of affordable land and housing packages is also essential and this will require the support of the Government and private sector participants from the housing industry.
“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,” he said.
He also applauded 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 I am confident that Papua New Guineans will embrace this opportunity.