The Maldives has implemented Maldives Monetary Authority (MMA)’s new regulation to provide affordable housing loan schemes.
The regulation was brought into effect Tuesday after it was published in the government’s gazette.
Under the regulation, all banks and finance companies are mandated to cut down interests for housing loan schemes as per the following:
- Loans with down payments of over 20 percent – 5 percent interest
- Loans with down payments of 10-20 percent – 5.5 percent interest
- Loans with down payments of 5-10 percent – 6 percent interest
Under MMA’s new regulation, amounts between MVR 1 million and MVR 2 million will be issued as housing loans.
The regulation states that the interest rate of the loan can be changed only after ten years, and even then the changes must be in accordance with market rates.
A minimum period of 25 years must be granted to repay the loan, though this period may be lessened if so wished by the borrower.
Any institute that violates MMA’s new regulation will be penalized with an amount of not more than MVR 2,000, which will be deducted for each day that passes without rectifying the infringement.
Prior to MMA’s regulation, the minimum interest charged for housing loans was nine percent, with a down payment of 50 percent.