Three banks in Mauritius are about to introduce a targeted measure of low interest rates aimed at clients with low incomes. A total of 36,900 loans will be affected by this measure. It is presented as a relief for households earning less than Rs 100,000 per month and having an approved housing loan not exceeding Rs 2 million.
MCB, SBM, and MauBank will apply a preferential interest rate varying between 4.5% to 5.5% to their existing housing loans in this category. The total outstanding balance of these loans is approximately Rs 22 billion.
The Governor of the Bank of Mauritius (BoM), Harvesh Seegolam, explained that these three banks will adjust their benchmark rate by around 100 basis points.
He emphasised that the 36,900 loans are not exclusively granted by these three banks, and the preferential and flexible rate will be determined by them.
Harvesh Seegolam reportedly shared these details on May 29, discussing developments related to the new monetary policy framework introduced in January 2023.
MCB, SBM, and MauBank are expected to provide further information about this measure during the coming week. It will come into effect next month and will last for 12 months.
Although the decision was necessary in the current economic conditions, as stated by Harvesh Seegolam, the household sector has generally fared well against inflation and interest rate pressures resulting from monetary policy tightening.
However, a certain segment of households, particularly those with lower incomes, remains vulnerable.
Other measures are also expected to be implemented for different client categories, including loan restructuring. In addition to MCB, SBM, and MauBank, the Governor of the BoM highlighted that other banks are offering various support programs.
Sources: Defi Media, L’Express
