Wednesday, February 8, 2023

Multiple banks will channel loans for RD$18,394.8 million after relocation of legal reserve funds

The Association of Multiple Banks of the Dominican Republic (ABA) estimated that the relocation of RD$21,424.4 million from the legal reserve provided by the Monetary Board for the financing of the construction sector and acquisition of low-cost housing, will have a multiplier effect on the Dominican economy and will facilitate access to decent housing for hundreds of families.

The union explained that, of the resources released for such purposes, a total of RD$18,394.8 million corresponds to multiple banks, of which RD$14,715.8 million (equivalent to 80%) will be allocated to the acquisition of homes and the remaining RD$3,679 million. (20%) to financing the construction sector.

The ABA considered that the provision of the Central Bank does not contradict its objective of counteracting inflation and is “a timely measure of great economic and social impact, given the great benefits it represents for thousands of Dominican families who could materialize their dreams of having a roof.” proper and worthy.”

He valued as positive that the measure will contribute to the acquisition at a fixed rate for the first five years of new financing for low-cost housing, at an interest rate of no more than 9% per year. He recalled that, according to the Law for the Development of the Mortgage Market and the Trust of the Dominican Republic, the value indexed to the date of these properties is up to RD$4.5 million.

In addition, the ABA explained that families could benefit from an even lower interest rate with the subsidies contemplated in the government program called “Happy Home”, whose facilities were recently improved by the Presidency of the Republic, to allow access financing by contributing as an initial between 2 and 5 percent of the value of the property.

The union that represents the country’s multiple banks pointed out that the relocation of these resources will boost the construction sector, whose growth was around 0.6% in the period January-November 2022 and, in turn, will have a positive impact on other sectors that offer services to this productive branch.

In addition, the ABA highlighted the multiplier effect of these liquidity facilities, which translates into greater economic growth and employment opportunities, in addition to the considerable impact in terms of financial inclusion, given that among the potential beneficiaries there are segments of the population that do not they are banked.

He argued that the positive effects of this measure will directly contribute to improving the quality of life of thousands of Dominicans, which constitutes one of the fundamental pillars to promote an increasingly developed, inclusive and secure society.

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