Minister Kh.Battulga: Housing loan shall be squeezed down to 6% per annum

Mar 16 • Banking, Construction, Finance, State Affairs • 887 Views • No Comments on Minister Kh.Battulga: Housing loan shall be squeezed down to 6% per annum

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photo courtesy of gogo.mn

Working group on “Housing for 100,000 households” program held meeting at Prime Minister S.Batbold’s office. Shortly after the meeting, MP Kh.Battulga, Minister for Roads, Transport, Construction and Urban Development, answered to some questions raised by journalists.

Q: Can you give some details of the working group  meeting.

Kh.Battulga: There are some painful problems in implementing the program of “Housing for 100,000 Households”. The most important one is the funding of the program. If Ministry of Finance and Mongolbank fails to take initiative in this part, our Ministry has no power to resolve the facing issue. Therefore, we provided necessary information to Prime Minister. Our Ministry has started its work and some works will kick off end of April or earlier May.

Last year, the Government made survey on the expenditure of “Grant of the Motherland” within the public and over 850,000 people said “We need money for our housing”. Therefore, I believe that 1 million MNT to be provided by the Human Development Fund, can be used for the prepayment of their housing. The working group discussed the issue and was instructed to compose financing scheme.

Q: Can you give us more details on the order of decreasing lease rate down to as much as 6%?

Kh.Battulga: According to the average of other countries, annual interest rate for house leasing is around 6% for long term lease. We will look for to decrease it down to this level. We have such capacity.  But people have right to choose which currency to choose.

Q: What other resources can be used for the implementation of housing program except Grant of the Motherland. Does Government have study on it?

Kh.Battulga: Mining industry is a good source for funding it. For example, we can get prepayment from mining companies which are going to engage in mining business in Mongolia, such as setting pre-condition of the mining companies to enter into the Mongolian market or mining operation to contribute for the housing program funding.

Q: Some officials already declaring that 1 bedroom apartment can be provided to each family free of charge using mining potentials. Do you agree with it?

Kh.Battulga: No, it is impossible. If there is a free thing, then it must be worthless. If man seeks benefit free of charge, he would become idle one.  According to our plan, those unemployed people will build road and construction and in return they will receive loan based on their salary. If there is free stuff, then everyone would rush for it. But they are not pensioners. Especially unemployed young people shall be recruited as an obligatory basis. I would like people should understand that with hardworking there will be better living.

Q: Housing loan shall be distributed only through Housing Financing Corporation? Or can commercial banks involve in it?

Kh.Battulga: Commercial banks will take part in this program. Development Bank establishment was adopted by the State Great Khural. Through this bank, major development oriented investments will be made.

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