Government requires banks to dedicate 12% of lending to mortgages

Thursday, May 5, 2011

The plans of Venezuelan President Hugo Chávez to address the country's housing shortage have touched the banking sector with a new rule requiring banks to dedicate at least 12% of their credit portfolios to mortgages.

Banks had previously been required to dedicate at least 10% of their portfolios to mortgage lending.

In addition to the new mortgage lending requirement, central bank BCV has lowered reserve requirements to 14% from 17%. The BCV said in a press release that the measure would free up an additional 10bn bolívares (US$2.33bn) for mortgage lending.

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The government housing program, dubbed Gran Misión Vivienda Venezuela, seeks to build 2mn homes in the next six years, with the help of the private sector.