Afghanistan’s central bank, Da Afghanistan Bank (DAB), on Tuesday announced a plan to grant home loans to government employees through commercial banks.
“Loans taken by government employees will be deducted from their salaries based on a percentage in five installments,” said Esmat Kohsar, the head of the central bank’s information department, who added: “Employees who have worked for three years in government organizations will be able to apply for the loan.”
The central bank’s move comes as the housing market in the country faces a severe recession.
According to the central bank, commercial banks can lend up to five million Afghanis (over 63,000 USD) to government employees as mortgage loans, and the loans will need to be repaid within five years.
The union of Afghanistan banks stated that it is very important to start the process of granting home loans and that banks are also interested in granting these loans.
The union said that based on an agreement signed between the union and Afghanistan’s central bank, the process of granting home loans in the country will begin soon.
“Relevant ministries should guarantee their employees. If a government employee cannot afford to repay the loan, the guarantor ministry must pay it. It should be taken from the employee’s pension. Along with being guaranteed by a ministry, a loan recipient will have to put up their property or land as a guarantee as well,” said Najibullah Amiri, director of the Afghanistan Banks’ Union.
Experts said that the process of collecting repayments of the bank loans will be challenging in the current situation in the country.
