Land allocated to BML for 3,000 affordable flats

The government has today handed over land from Vilimale' and Hulhumale' to national bank Bank of Maldives (BML) to conduct an affordable housing project under the central bank Maldives Monetary Authority (MMA)'s Inclusive National Affordable Housing Scheme policy. 

In a ceremony held at BML Head Office, the housing ministry signed an agreement with BML, handing over land allocated for 3000 flats in Vilimale', Hulhumale' Phase 1 and Hulhumale' Phase 3 to BML. 

Speaking at the ceremony, BML CEO Mohamed Shareef said that the project will be undertaken by the bank's subsidiary BML Affordable Home Leasing Pvt Ltd, which is fully owned by the bank. 

Last month, MMA introduced the Inclusive National Affordable Housing Scheme policy, under which affordable housing will provide financing within the financial system to first-time home buyers in the Male' region. MMA stated then that 10 to 15 percent of the loan portfolio of all banks should be set for this scheme. 

Shareef stated that under MMA policy, participation in this scheme is mandatory for all banks. As the national bank and the issuer of 52 percent of all loans in the Maldives, he said BML has a responsibility to lead the initiative. 

The purpose of the BML subsidiary BML Affordable Home Leasing Pvt Ltd is to develop these 3000 flats and to lease them under a Lease Ending With Ownership model. Once the rent period is completed, the flats' ownership will be transferred to the renters. 

"The reason this is done is, that doing this would significantly bring down costs. We also believe it will bring down the risks to the bank. That is because the land cost, financing cost and development cost, and other such expenses are decreased," Shareef said. 

Shareef stated that further details regarding the project will be shared at a later date. 

MMA has allowed banks to opt for one of two options in providing financing facilities under the scheme. One is the Lease Ending With Ownership model, such as is offered by BML and where banks finance the project, and the other is End User Financing Option, where the project is financed by developers/investors. 

Speaking at the ceremony, Minister of Construction, Housing and Infrastructure Dr Abdulla Muththalib stated that today is the day that the government and the national bank have joined forces to work together towards addressing the most major challenge faced by Maldivians. 

Under this project being conducted by BML, 300 flats will be developed in Vilimale', and 2,700 flats in Hulhumale' Phase 1 and Hulhumale' Phase 3, he announced. 

"To ensure that these flats can be given at affordable rates, the government is handing over the land to the bank, without any additional costs by the bank. The State will be carrying that cost. With this, God willing, the price of these flats can be maintained at near the price of the social housing flats that are being given now," he said. 

Muththalib said that the flats will be given to recipients deemed eligible through applying for a programme announced by the government. These recipients must also fall within requirements set by the bank, he added. 

The MMA has previously, in 2017, issued loans to purchase flats through housing projects via banks. This includes flats at the Male' Grand and Gaakoshi flats.