Signing MoU between -MUDL / DAB, ABA & ABA (Afghanistan Builders Association)
Date: June 01, 2021
On June 01, 2021 – A quadrilateral MoU was signed between the Ministry of Urban Development and Land, Da Afghanistan Bank (DAB), Afghanistan Banks Association, and the Afghanistan Builders Association, aims at:
- The development of the housing sector in Afghanistan, including to improve housing affordability and overcome constraints in access that currently make adequate housing unaffordable to the vast majority of the population
- To encourage the Afghanistan Builders Association (ABA) to use construction loans;
- To increase usage of construction loans by construction companies;
- To provide the facilities for construction loans for private companies;
- Loans shall be provided based on construction business plans; Construction business plans should include the construction area, target market, construction costs in total and by square meter, and intended sales plan
- Financing shall be provided only for the phase under construction. Additional financing will be provided after the completion of each phase
- The land used for construction shall be provided to the bank as a guarantee
- DAB Will issue specific procedural guidelines to support the banks and also increase concentration of loan in construction industry.
- This will be great opportunity for Banks to invest, by utilizing idle funds
Duties and Responsibilities of each party under signed MoU
Da Afghanistan Bank (DAB):
1. Encourage the use of CFP loans
2. Develop procedures to standardize the terms of such loans
MUDL:
1. Ensure proper zoning of land for construction projects
2. Identify land suitable for housing construction projects
3. MUDL shall help property registration and support the process for changing Orfi Qabala to Sharaee
Qabala of the government land where construction will take place
Afghanistan Builders’ Association
1. shall compile and submit a list of potential private projects;
2. Compile a list of potential construction companies and the background of each company
3. hall compile and submit a list of potential public projects Article
Banks Responsibilities:
1. Provide such CFP loans to qualified construction companies;
2. Banks shall provide report of their activities on monthly basis to FID;
3. Banks shall ensure that clients do not sell the house as a mortgage in the second market;
4. Banks should determine the terms of the loan
