Construction, Housing and Infrastructure Development Bank (CHIDB) has lent over Ks227 billion for construction, commercial and housing sectors with interest rates of 10.5, 11 and 13 per cent per annum respectively, sources said.

The CHIDB granted four-year, eight-year and 15-year loan periods for housing mortgage loan in line with the project requirements and the interest rates are 10.5, 11 and 13 per cent per annum based on the source of funds, said Chief Policy Officer Win Zaw from the bank.

“Commercial loan is for the businessmen that want to expand their companies if they needed a surplus of capital to do so. Construction and housing loans are concerned with development projects. Property developers need money to build housings and the bank provides housing mortgage loans for those who want to buy a house or an apartment. So the commercial and construction loans are totally different,” he said.

However, the public have been criticizing the differences in interest rates because the interest rates are based on the availability of source of funds.

“Source of funds means we have three kinds of funds at our bank. One kind is savings account for the public. We have to give them 8.8 per cent of interest rate based on the amount of money they saved. The interest rates for fixed accounts are from 8.5 to 10 per cent based on the fixed periods. We lent with 12 per cent of interest rate. Another kind is a loan in which the government gave us the loan with 8.5 per cent of interest for people who want to buy homes and we lent this money with 10.5 per cent of interest. The last one is construction loan for constructors and the government gave us the loan with 9 per cent of interest. We lent it with 11 per cent of interest. So the bank is providing loans based on the availability of funds,” he said.

The construction loan is the most among loans in CHIDB: Ks121 billion for construction loan, Ks80 billion for commercial loan, Ks24 billion for housing loan and 0.1 billion for employee loan.