Tag: loans in zambia

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ZNBS Launches Timange Housing Loan:

A New Path to Homeownership

Zambia’s housing landscape is evolving, and the Zambia National Building Society (ZNBS) in collaboration with Habitat for Humanity has just introduced a new product aimed at expanding access to homeownership. The “Timange Housing Loan” is designed to cater to a wider demographic, specifically targeting low-income earners, including those in the informal sector. We watched the launch event on February 27 2024 and here’s what we understood after all the speeches.

Key Features of the Timange Housing Loan:

  • Target Audience: This loan product is geared towards both formally employed individuals and those in the informal sector, acknowledging the diverse economic realities of Zambians. However, it seems to only target women (to be clarified)
  • Accessibility for Non-Salaried Individuals: A significant aspect of the Timange loan is its inclusion of non-salaried individuals, a segment often overlooked by traditional lending institutions.
  • Village Bank Group Requirement: A crucial component of the loan process is membership in a village bank group that holds an account with ZNBS. This collective approach aims to build trust and shared responsibility.
  • Flexible Repayment Terms: The loan offers repayment periods ranging from 3 to 36 months, providing flexibility to suit different financial situations.
  • Competitive Interest Rates: Interest rates start from 3%, making the loan potentially more affordable.
  • Application Requirements:
    • Employed individuals require a 3-month payslip and a letter of employment.
    • All applicants must belong to a village bank group that has an account with ZNBS.
  • Fast Approval: ZNBS aims to provide loan approval within 48 hours, streamlining the process for applicants.

What This Means for Aspiring Homeowners:

The Timange Housing Loan represents a significant step towards financial inclusion in Zambia’s housing sector. By incorporating village bank groups and catering to the informal sector, ZNBS is attempting to break down traditional barriers to homeownership. The short approval time also adds to the attractiveness of this new product.

Now, we’d love to hear from you: How do you think the village bank group requirement will impact the accessibility of this loan? What do you think about getting a loan to build your home. Share your thoughts and experiences in the comments below!

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Seizing the Opportunity: Buying Foreclosed and Repossessed Properties in Zambia

In our inaugural issue of the Builders Blueprint, we talked about buying land from the councils as an affordable option available to everyone. The Zambian real estate market presents a unique opportunity for both local and international investors. Today, let’s talk about the acquisition of foreclosed and repossessed properties by banks and financial institutions. 

This often happens when someone borrows money to buy a property or borrows it for other purposes but puts the house as collateral. When they fail to pay back, the bank takes back the property. This leaves the bank with excess stock of properties. Banks are not in the real estate business, they are in the money business. 

There is a growing number of properties being foreclosed as evidenced in the local newspapers and bank websites. This offers a chance to acquire land and houses at potentially significant discounts. Let’s analyze this opportunity.

The Benefits of Buying Foreclosed Properties

  1. Affordability: Foreclosed and repossessed properties are often sold at a substantial discount compared to market rates. This is because the bank would rather get rid of the property and use the cash for other investments. They set a minimum sale value however, in some cases it might be possible to go lower if the conditions are in your favour.
  2. Investment Potential: As the Zambian economy continues to grow, real estate investments can yield significant returns. 
  3. Diverse Property Options: Foreclosed properties range from residential homes to commercial properties, offering a variety of investment opportunities. Sometimes foreclosed homes are in very good locations which can yield great returns when repurposed.
  4. Legit Business: the process of lending money or offering a mortgage by banks and financial institutions requires them to carry out background checks and check legitimacy of the property. Therefore, foreclosed properties are already vetted by the bank to be legitimate. This is half of our work done for us by others for free.

Potential Challenges

  1. Legal Complexity: Navigating the legal process of acquiring foreclosed property can become complex and time-consuming. It’s always advisable to consult with a local real estate lawyer to ensure a smooth transaction.
  2. Property Condition: Foreclosed properties may require significant repairs and renovations.The properties can range from new to very old. It’s important to exercise due diligence before making the bank an offer.
  3. Market Fluctuations: Real estate markets can be volatile, and economic factors can influence property values. Sometimes properties may be marked up due to market fluctuations or the bank attempting to recover their moneys.

The Diaspora Advantage

Zambians in the diaspora and foreign investors are uniquely positioned to capitalize on this opportunity. With a global perspective and access to international financial markets, they can leverage their knowledge and resources to identify lucrative deals. Additionally, diaspora investors can often secure financing from international institutions, providing them with a competitive edge.

Key Considerations for Potential Buyers

  • Thorough Due Diligence: Conduct a comprehensive property inspection to assess its condition and potential value.
  • Consult Local Experts: Seek advice from local real estate agents, lawyers, and property managers to navigate the intricacies of the Zambian market.
  • Secure Financing: Explore financing options from local and international lenders.
  • Consider Long-Term Plans: Determine your investment goals and whether you plan to rent, sell, or develop the property.

By carefully considering these factors and taking advantage of the opportunities presented by the foreclosed property market, individuals and investors can make sound real estate decisions in Zambia. WOULD YOU FEEL GUILTY BUYING A PROPERTY THAT WAS FORECLOSED?