17.10.2022
The Ministry of Finance has expressed concern and dissatisfaction with the high amount of debt owed to public organizations that give people loans for housing – loans issued by the state.
“The greatest risk of losing money to the government is associated with loans made to individuals through public law organizations and other financial institutions … and where the monitoring of these loans by the organizations involved has not been adequate,” the Treasury Department says . in its latest Financial Risk Report.
In particular, three organizations are noted in the report – the Housing Finance Corporation (the worst offender), the Central Agency for Fair Burden Sharing and the Cyprus Land Development Corporation.
As of the end of March 2022, 61.67% of loans issued through the Housing Finance Corporation (HFC) were declared non-performing. In addition, HFC terminated contracts and/or sued 112 loans worth €59.7 million .
At the Central Agency for Fair Burden Sharing, at the end of March 2022, non-performing loans accounted for 27.9% (96.5 million euros) of all loans.
The Cyprus Land Development Corporation has also found itself in a quandary with loans it has made since 2001 to low-income families. At the end of March 2022, the outstanding loan balance was €7.64 million and the non-performing loan balance was €34.17 million.
In addition, the organization went to court on 139 out of 521 loans recognized as non-performing. Ownership remains with the organization until the full repayment of the loan.
The Treasury Department report states that non-performing loans, delinquent loans and litigation against major debtors pose risks of losing money, “given that the aforementioned loans were made with state capital and their non-repayment. would be a loss to the state.
