Kredex system maxed out

  • 2004-08-05
  • Baltic News Service
TALLINN - The Kredex loan guarantee limit of 700 million kroons (44.7 million euros) will be exhausted this fall at the present rate of borrowing, meaning that young families, tenants of restituted houses and apartment associations may be stripped of their present state loan guarantees.

"It seems that as early as November we will be in a situation where no further guarantees can be issued. Which means that the opportunity for people to take loans at a lower self-financing level will probably diminish," Kredex CEO Maive Rute told TV3.
The Economy Ministry was drawing up a bill to increase the loan guarantee limits set a year-and-a-half ago, though the final decision rests with Parliament.
Early in 2003 the government established the Kredex loan guarantee ceiling at 700 million kroons, thinking that it would suffice for two to three years.
Thanks to the Kredex loan guarantees, it is possible to receive housing loans at less than the current 30-percent self-financing level.
Pirko Konsa, an Economy Ministry official, said the ceilings could be raised to 1 billion kroons.
She said more than 10,000 families had acquired housing thanks to Kredex loan guarantees.
Kersti Arro, development director of Hansapank's housing financing division, said that in the first half of this year 10 percent of the bank's borrowers - or a total 700 clients - had taken advantage of the Kredex loan guarantee opportunity.