The Affordable Home Leasing Pvt Ltd, a subsidiary of the Bank of Maldives (BML), has officially entered the real estate business to help President Mohamed Muizzu fulfil his housing pledges.

At a ceremony held at BML today, the Construction Ministry awarded the contract to the Affordable Home Leasing Company to build 3,000 housing units under the National Housing Scheme's lease-to-own model.

The agreement was signed by Affordable Home Leasing Company's Managing Director Hassan Sham and Construction Minister Abdullah Muththalib.

Muththalib said BML will build 300 housing units in Villimale' and 2,700 housing units in Hulhumale' Phase 1 and Phase 3 under the project.

The minister said free land will be allocated to BML to make the housing units affordable. Although the government can give free land to BML in Villimale', it needs to purchase land from Housing Development Corporation (HDC) to give free land to BML in Hulhumale'.

"The project will include 300 housing units in Villimale' and 2,700 housing units in Phase 1 and Phase 3 of Hulhumale'. The government is giving land to the bank at no additional cost to make these places affordable," Muththalib stated.

He added that the 3,000 housing units will be given to those who apply for a program announced by the government. However, he did not give any further details.

"The price of these units will be kept at the same, almost the same price as the units being leased now. The units built under this project will be given to those who apply for the program announced by the government. Recipients will have to meet the criteria set by the bank," he said.

At the ceremony, BML Managing Director Mohamed Shareef said the bank formed a subsidiary company to run the housing project under a lease-to-own model. Recipients can own the units after paying the lease.

"This is not a loan. We are renting on a leased-owned model. It doesn't require equity. It doesn't require an initial investment. Those who are eligible can get immediate housing under home owned model," he said.

On October 5, the cabinet formulated a housing policy called the National Housing Affordability and Accessibility Project. Under the policy, projects will be implemented in collaboration with financial institutions to provide housing units under the lease-owned model.

Under the scheme, each bank is required to provide finance to the scheme between 10 percent and 15 percent of its total loan portfolio as determined by the central bank, Maldives Monetary Authority (MMA).

The MMA has drafted a regulation on the Inclusive National Housing Affordable Housing Scheme.

Shareef said BML, which accounts for 52 percent of the loans disbursed by banks in the Maldives so far, decided to take the initiative and set up a subsidiary company named Affordable Home Leasing Pvt Ltd.