I promised to keep unfolding details about National Building Society within a series. The organization itself is eager to engage the public and tell their own story and so they organized a media brief this morning. I attended the event and I just want to share the headlines that spoke to me. Consider this Episode 1.a:
1. Willing to be transparent
We all know that they are not a publicly traded business hence they are not required by law to disclose their financials, strategy and operations to the public. They did it anyway and that’s welcome. I think it’s important that they continue this public disclosure because although they do not trade on the ZSE their shareholders are the Zimbabwean workers (the public) ultimately through the funds they contribute to NSSA.
2. Deliver 10 000 built houses by end of year
Yes, that’s right end of 2017! This number just seems too huge to me given the Zim economic context. I raised this question with the MD at the event and he has a plan: mostly deliver this through strategic partnerships. My conclusion is that whether they fail or succeed at this goal I like their hunger. That hunger will see them deliver substantially more than their competition at least.
3. Main thrust is to increase the housing units stock instead of financing purchases or refurbishments
These guys are clear on what they want to do. Yes, they will offer credit to people who are buying already built homes or refurbishing but that is not their core. Their core is to increase the number of housing units in the market altogether so they are more interested in financing the building of homes.
4. Deliver decent houses at costs that permit $120 as repayment installments
This is the most affordable option they want to achieve. Of course design is not the only factor e.g land costs will have a bearing on how much the house will cost. So far they have achieved monthly repayment of $148 in one of the housing projects they are financing so $120 is within reach.
5. Houses not stands…
Within the property development and finance sector in Zimbabwe right now most financing is going towards the servicing of plots of land into residential plots (stands) and not the actual building. The NBS thinking is that this approach may make it really difficult for a person who buys the stand under such arrangements to then build because they will now have the loan on the stand to repay while at the same time they are still paying rent because they can’t move into a stand… I think this is not only beneficial to the client but quite prudent on the part of NBS because it limits the default risk if the borrower is spread too thin.
6. The mortgage is insured
No one wants to think of dying but even more, no one wants to think of their family losing everything if they die. If the unwanted (death) happens whilst you are still repaying your mortgage, the insurance cover kicks in to give NBS its dues and protect your loved ones from having to take over the debt or even lose the property.
7. Other products built around helping you access the mortgage
NBS is not naive, they know most of their potential clients already have some other debt. They have a product which allows you to consolidate all your debt with them i.e they take care of your debt so you are left owing them (no not Mafia style). They also have products that allow you to save towards the mortgage deposit or even borrow to raise the deposit.
8. You may not need to raise a deposit!
The deposit when accessing NBS mortgages is 15% of total borrowing. If you are buying your house under a company scheme or a pension scheme etc then you may not have to pay any deposit at all. Except of course the mandatory legal costs. If you have your own stand you may not need to pay the deposit as well.
Remember, you can signup for an NBS account here.