The Guyana Bank for Trade and Industry (GBTI) has set aside $1 billion for its new ‘Quality Lifestyle’ loan plan, which seeks to encourage Guyanese to aspire towards an improved standard of living.

The launching of the ‘Quality Lifestyle’ loan plan took place at GBTI’s Regent Street branch last evening and coincided with the re-commissioning of the building.

According to the bank’s Chairman Robin Stoby, the $1 billion fund is allocated as follows: $400 million for the low-income housing plan, $400 million for the residential mortgage loan plan, $100 million for the personal loan plan, $50 million for the automobile loan plan and $50 million for the consumer loan plan.

He said that the bank recognises the importance of family values and seeks to promote these values in an atmosphere free from want and concern for what may have seemed to be unattainable comforts.

According to the GBTI brochures on display, low-income housing loans can be had for up to $2 million at a rate of eight percent per annum. Potential borrowers would need to produce their approval for a house lot from the Ministry of Housing and Water.

Automobile loans are available at a rate of 15% per annum and the payback period is 40 months for a new vehicle and 36 months for pre-owned one. The bank requires that the monthly installments not exceed 30% of the gross income of the borrower. The bank will lend $3.5 million for a new vehicle and $1.5 million for a used vehicle.

The personal loan plan, with interest rates of between 12% and 14% caters for home improvements, education, vacations, medical expenses, weddings and engagements and household appliances. In addition to this, the bank will also lend up to $250,000 for the purchase of household items at a rate of 17% interest per annum under its consumer care plan.

The ceiling for residential mortgage loans is $10 million with the repayment period ranging from between five and 20 years at an interest rate of 12% per annum. For this the bank requires the borrower to make a 20% contribution. All of the interest rates are subject to change.

Chief Executive Officer (CEO), R.K. Sharma, told Stabroek News that loans from the middle income sector are easily sustainable and called the package a right mix for an economy such as exists in Guyana.

“We did a market survey and recognised that this is the trend,” he said. He noted that in 1995 the banking sector loaned $10 billion in the agriculture sector - mostly rice - but that most of those borrowers have branched off into other sectors because of difficulties. “What you had for the last few years was high liquidity and low demands. This is the area which needs to be filled,” he said.

The launch of the loan plan follows the bank’s signing of a low-income housing agreement with the Ministry of Finance in August of 2001. This agreement caters for low-income earners who own house lots or were allocated house lots. Sharma said that after the signing of the agreement, the bank had made known to the government its concerns on certain clauses and requested a re-examination of these clauses.

He said that the discussions lasted for two years and the government gave consent to the changes in July of this year.

He noted that in 1994, the bank funded the construction of 50 low-cost houses in the North Ruimveldt Mekdeci Scheme and as a result has expertise in managing such projects.