Afghanistan Banks Association

د افغانستان د بانکونو ټولنه
Afghanistan Banks Association
Voice of The Banks

Afghanistan Banks Association

A tripartite MoU was signed between the Ministry of Finance, DAB & ABA

Date: June 2, 2021

On June 2, 2021, tripartite Memorandum of Understanding(MOU) was signed between the Ministry of Finance, Da Afghanistan Bank (DAB) and Afghanistan Banks Association (ABA) on facilitating the mortgage lending to government employees to be utilized in purchase of houses.
Commercial banks in any country plays an important role toward boosting public-support projects through access to finance to various economic sectors. Da Afghanistan Bank, with the support of Afghanistan Banks Association and other stakeholders are trying to encourage access to finance and mobilize economic resources. The aim of singing this MoU is:
1. To encourage government employees to use housing loans
2. To increase usage of housing loans by the government employees
3. To provide the facilities for housing loans for government employees
4. To expand banks’ loan portfolio and profitability.

As per this MoU, the housing loan shall only be provided to the employee who is currently employee of Government and have completed at least three years of consecutive work at government.

Duties and Responsibilities of each party as per this MoU:
Da Afghanistan Bank (DAB):
• Develop standard procedures for GEMP loans and supervise the overall process of loans provided by banks for housing;
• To support the loan issuance process by banks;
• Investigate any complaints of the GEMP program
Ministries’ responsibilities:
• Ministries shall provide a list of government employees salaries to the concerned banks which are applying for housing loans;
• Each line ministry shall create a GEMP (Government Employee Mortgage Program) Loan Committee to review employee loan applications and compile them to send to banks for approval 3.
• MoF in consultation with the relevant line ministries shall deduct 30% from the employees’ salaries to repay loans;
• All governmental entities shall encourage the housing loan process;
Banks’s responsibilities Based on this MoU:
• Banks shall Provide housing GEMP loans to government employees;
• The loan provided to employees shall be deducted from their salary on monthly basis