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Housing, construction finance shows robust growth, SBP

As a result of the State Bank of Pakistan (SBP) initiatives, the work on facilitating housing and construction finance is gaining momentum.

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A recent statement by the SBP revealed that the housing and construction finance portfolio rose to Rs148 billion at the end of June 2020 to Rs202 billion in March 2021.

“This represents a growth of Rs54 billion or 36% in three quarters of FY21 compared to a stagnant position in earlier quarters,” it said.

“Such level of growth in housing and construction finance within a short period of time has never been witnessed in Pakistan’s history”, it added. Till April 2020, the banks had received applications for financing of more than Rs52 billion from the general public under the scheme revealed SBP.

Out of this amount, the banks have approved over Rs15 billion worth of financing for the applicants while the rest are at different stages of evaluation and approval process.

“The State Bank has been actively engaged with commercial banks to ensure that a vast majority of the public benefits from the ‘Mera Pakistan Mera Ghar’ housing finance scheme,” read the SBP’s statement.

SBP with the help of Pakistan Banks’ Association (PBA) is ensuring that the process of applying for housing finance remains hassle-free.

Presently, commercial banks have designated 50% of their branches, around 7,700, across the country for accepting applications under the “Mera Pakistan Mera Ghar” housing scheme. The remaining branches will also provide basic information about the scheme and refer applicants to the designated branches.

“Banks are regularly advertising features of the scheme to attract and encourage potential customers,” said the Central Bank. “In order to address complaints, the State Bank has established a comprehensive complaint resolution mechanism, which comprises an internet portal supported by a network of State Bank of Pakistan and commercial bank staff.”

The government recently revised its markup subsidy scheme of housing finance significantly to align with the prevailing housing market dynamics in its effort to promote low cost and affordable home ownership among low to middle-income groups.

In October last year, the government started providing mark-up subsidy facility for the construction and purchase of new homes in a bid to promote housing finance to first time home buyers at subsidized and affordable markup rates.

Read More: PM Khan directs SBP and NBP to relax housing loan conditions

“With changes in the key parameters of the scheme, government of Pakistan has increased the total funding allocation to Rs36 billion on account of markup subsidy payment for financing over a period of 10 years and has assured continuity of the facility,” the State Bank of Pakistan had said.

“It is expected that revised parameters will further assist in materialising the government’s vision of providing housing to the low- and middle-income segments of the society.”

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