20.02.2024
The Housing Finance Corporation (HFC) acknowledged on Monday there were delays in disbursing loans to applicants, but again blamed it on staffing shortages. The issue came up in the House Finance Committee as it debated HFC’s 2024 budget.
CEO of HFC Christoforos Kaplanis told MPs there had been increased demand for loans in 2022 and 2023. In 2022, the public entity approved 265 loans totaling €31.3 million, and in 2023, 374 loans totaling €57.5 million. Kaplanis said they are prioritizing home loan approvals so that down payments made by buyers are not “lost.”
Deputies criticized him for constantly complaining about delays in issuing loans. Kaplanis attributed this to staffing shortages, saying the hiring process, which began in 2021, was completed only last year. He said Nicosia and Limassol had the greatest need due to population size. Despite the size of these two cities, they only have one HFC branch each. For this reason, some loan applications submitted in Nicosia and Limassol are transferred to branches in other cities. According to Kaplanis , at the moment, processing an application takes on average six to seven months.
Akel MP Andreas Kafkalias complained that HFC “is not at the level to adequately carry out its mission.” He pointed to significant delays in the processing of applications for various government-funded non-performing loan schemes, as well as delays in the conclusion of restructuring agreements. “And this is at a time when commercial banks are either not issuing new loans or the cost of lending is very high.” The Akel MP called for action to immediately improve the staffing and technical problems at HFC.
As of end-March 2022, 61.67% of loans disbursed through HFC were classified as non-performing. In addition, HFC terminated contracts and/or took legal action on 112 loans with a debt balance of €59.7 million .
