Angola’s National Bank (BNA) directed the commercial banks to convert the foreign currency housing lending granted to low-income customers into national currency (kwanzas), Angop has learnt.
The guidance also covers the sale of foreign currency to the banks to support the exchange position resulting from the said conversion.
The measure, that runs until 30 December 2020 and which should be extended if the need arises, comes in response to the exchange rate of the latest years.
The move also has to do with the lower availability of the foreign currency that results in the significant increase of the clients efforts rate and thus worsening the risk of default on these credits.
“The BNA finds it appropriate to create conditions to facilitate the conversion, into national currency of the foreign currency loans, contracted for self housing by low-income private clients”, the statement reads out.
The instruction includes the private customers with credits in foreign currency to pay their own residence and who are currently deprivade of resources in this currency and who want to convert it into national currency.
However, in compliance with the instruction the banks should contact their customers, who are in this situation, in order to get informed if they are interested in converting the foreign currency credits into national currency.
Under the terms and conditions, the BNA recommends the need to keep written proof of the contact with the customer and its answer.
Banks should consider when necessary taking into account the finance capacity of the customer and in addition to the deadline extension.
Other measures including the reduction of interest rate and commissions to reduce the effort rate, especially when it is above 40% aimed to reduce the default risk.
Also, in order to reduce the defaults risks, in the cases the efforts rate is above 60%, the banks are required to consider other alternatives, such as the reduction in the value of benefits during an initial period.
Banks are also responsible for informing the customer that the exchange rate and interest rate in the simulation of the financial plan may change due to the change in these rates between the date of the simulation and the conclusion of the contract.