The Government Housing Bank, the country's largest mortgage lender, will soon offer a new lending package called "Baan Porpieng"

to support low-income groups, with lower lending rates across the board, president Khan Prachuabmoh said yesterday.

The package is part of an economic stimulus programme being prepared by Finance Minister Chalongphob Sussangkarn and is expected to be announced on May 2, he said.

The GHB will coordinate with Local Administration Organisations to find houses for lower-income groups, he said. Local governments will arrange projects and people can then ask for housing loans from the GHB. The project is called Baan Porpieng or "Small House".

The average house price is expected to be Bt350,000, he said. The bank will provide loans to cover the entire house price.

Khan said the bank had launched pilot projects with the government in Saraburi province, where 100 houses are now available.

Chalongphob is preparing an economic stimulus package largely aimed at helping poor people suffering from the economic slowdown.

Khan, who is also an adviser to Chalongphob, said he expected the finance minister to announce the fiscal measures, aimed at helping home-buyers, on May 2, when meets the state's specialised financial institutions (SFIs). Chalongphob will also ask other SFIs to provide lending support for lower income groups.

Khan apparently ruled out the possibility of a cut in the specific 3.3-per-cent business tax currently levied on property developers, saying the finance minister wants to help home-buyers not land developers.

He added that if ministers wanted to help retailers, he might cut mortgage and transaction fees.

The GHB plans to lower interest rates after the central bank lowered its policy rate by half a percentage point to 4 per cent. Khan said the central bank is likely to lower its rate further, so the GHB will wait a little longer before it cuts mortgage rates for all clients.

He said the bank planned to offer a three-year fixed rate for home-buyers. Small loans will be charged a lower rate, ranging from Bt500,000 at the lowest and rising slightly higher for loans between Bt500,000 to one million and one million to three million. Previous three-year fixed rates of 3,4 and 5 per cent, respectively, were very popular among home-buyers.

Wichit Chaitrong

The Nation