Housing Development Finance Corporation (HDFC), Sri Lanka's only housing finance bank, has implemented a special social security scheme in the form of a housing fund to cater to the needs of several identified social segments in the country.
The main focus of the fund is to provide a favourable service to low and middle income segments that constitutes 60% to 70% of the population, who frequently face difficulties in obtaining loans and other financial services. Members of this fund will be provided access to housing finance without any collaterals and credit documents, HDFC AGM Business Development and Marketing D. V Pathirane said. The fund will offer housing loans to investors after a 10 to 15 year period of accumulation of the fund of an investor's contributions.
He told Business Times that the significant feature of this fund is that it will act as a unique retirement fund for the country's future aging population. Sri Lanka's social security schemes for these people are limited to the pension of the Public sector and the EPF and ETF benefits for the private sector. But there is no such assistance for a 35% self-employed population. The HDFC has launched this fund as an alternative long term investment plan with the aim of providing retirement benefits for the elderly population of the country including the self employed. The fund is designed to provide higher interest than the current market rates. The annual interest rate is equal to 75% of the lowest interest charged for housing loans, Mr. Pathirane added. The minimum initial investment can begin with Rs. 500 and the subsequent investments can be any amount and made at any time.
The members of the fund will be able to withdraw their money contributed to the fund with interest after reaching 55 years of age. Mr. Pathirane said that this will be helpful for them to lead their lives. He added that they are in the process of setting up of cluster funds under the housing fund for the benefit of farmers fishermen, industrialists, traders, three wheeler drivers, etc. Cluster funds for Manning Market Traders Association with 2000 members, a group of artistes, media personnel and HDFC employees have already been established, he revealed. (Bandula) |
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