Zigama CSS cuts interest rate on mortgage loans

Zigama Credit and Savings Society (Zigama CSS) has slashed interest rates from 15 per cent to 10 per cent on mortgage loans to make it affordable for members to own homes. The cooperative bank’s management indicated during the General Assembly of members on Friday, November 2020 at the Ministry of Defence Headquarters that the review targets first-time homebuyers. Zigama CSS management in November last year to study modalities that would bring down interest rates with the idea to make it easier for mostly junior members who don’t have houses to own them. According to James Ndahiro, the board chairman of Zigama CSS, they issued the directive on the instruction of President Paul Kagame, who is also the commander in chief. “We have resolved that our junior members who haven’t yet acquired their own homes, the Bank plans to offer them mortgage loans at a more affordable interest rate of 10 per cent,” Ndahiro said. According to Ndahiro, at least 70 per cent of members of Zigama have acquired homes, and the review of interest rates is meant to raise that number to 100 per cent. Zigama members who acquire loans at 10 per cent interest rate will be able to pay back the loan in not more than 20 years. “We have also decided to reduce the interest rate from 15 per cent to 14 per cent for existing homeowners, but who may need another home for various purposes,” the chairman noted. At the General Assembly, Ndahiro announced that junior members who were previously allowed to acquire personal loans of not more than Rwf5 million will now be allowed to acquire up to Rwf7 million. The Bank serves security institutions including Rwanda Defence Force (RDF), Rwanda National Police (RNP), Rwanda Investigation Bureau (RIB), Rwanda Forensic Laboratory (RFL), National Intelligence and Security Service (NISS) and Rwanda Correctional Services (RCS). Financial performance The Bank, like the rest of other financial institutions in the market, was affected by Covid-19 pandemic, which saw non-performing loans increase from Rwf9.5 billion in the first quarter of this year to Rwf11.8 billion in the third quarter. “We mainly took actions that were aimed at weathering the storm, which saw non-performing loans increase,” Col Emile Nkundimana, the Bank’s Chief Executive Officer said while presenting the financial report. Such actions, he added, included restructuring loans, and revising loan repayment terms. However, the bank projects to remain profitable, anticipating to record a net profit of Rwf12 billion by the end of this year in December, from Rwf11 billion registered last year. Zigama projects net profit will increase to Rwf15 billion next year, driven by increased deposits. The bank’s total assets are estimated to reach Rwf407 billion by December from Rwf340 billion last year. To achieve that, the cooperative bank is targeting to mobilise more members of security organs to bank with Zigama. Currently, only 30 per cent bank with Zigama, Ndahiro said.

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Zigama CSS cuts interest rate on mortgage loans