The National Corporation for Housing Loans Insurance to begin working

The Finance Minister Mladjan Dinkic said that the Government adopted the legal acts necessary for the beginning of work of the National Corporation for Housing Loans Insurance, and also the beginning of application of the Law on Housing Loans Insurance.

Dinkic explained that operating principles for this institution were adopted, as well as work programme, financial plan, and categorisation of jobs, and announced that on Monday job vacancies would be announced in order to employ experts in this corporation. Minister stressed that a public call was announced inviting banks and other financial organisation to sign the contract in order to insure receivables on account of housing loans.

The Minister expressed his expectations that during the month to come first banks would begin to close contracts on loans insurance, and said that, in accordance with the rules of operation of this organisation adopted at the Government session today, through this Corporation the state would insure up to 75% of potential banks’ losses incurred by granting housing loans to citizens.

He added that the National Corporation for Housing Loans Insurance should insure first loans before the end of the year, whereas the full swing in its work was expected in the next year.

The results of marketing research conducted by this institution show that at the moment there are nearly 50,000 households in Serbia financially that can afford a loan under conditions set by the Corporation. Dinkic explained that loans would be granted for the period of 20 to 30 years, with the interest rate not higher than 9% a year, and with the tendency to decrease. He expressed his expectations that the Commercial court would be efficient and register this institution as soon as possible, so that it can begin to operate.

The director of the National Corporation for Housing Loans Insurance, Aleksandar Jovic, pointed out that the goals that this institution wanted to achieve were the increase of potential number of users of housing loans by means of abolishing deposits, reduction of interest rate and the extension of payback period to 30 years.

He explained that the effects to be thus achieved were: the reduction of receivables risk on account of housing loans with the banks, direct influence on the increase of demand for housing units, i.e. direct influence over construction industry and economy.

Dinkic stated that he talked today to the Head of the World Bank’s Mission for South-Eastern Europe Orsali Kalantzopulos about the realisation of this year programme of the World Bank for Serbia, as well as about the next three-year arrangement and the plan for 2005.

He reiterated that Serbia already got $40 million in July, and added that another $80 million credit is expected by the end of the year, taking into account the fact that the programme agreed with the World Bank is being successfully implemented.