The government’s efforts to assist people having slim resources in offering low-cost housing has gained momentum. More people are now approaching banks and other financial institutions to acquire low-cost housing finance offered at subsidized rates under the Prime Minister’s housing scheme.
The scheme would help many people and protect banks from the risk of default by loan-seekers. The Pakistan Mortgage Refinance Company (PMRC) has inked risk-sharing agreements with the banks to cover the risk against default by the borrowers availing this scheme. PMRC has allotted a fund of Rs15 billion in collaboration with the World Bank to cover up to 40% losses of banks under the scheme.
Hitherto the banks and other financial institutions have disbursed about hundred million rupees to the desired applicants under the scheme. The PMRC CEO Managing Director, Mudassir H Khan, has said that the Prime Minister along with the SBP and several related committees meet on a weekly basis to foster the disbursement process.
According to State Bank of Pakistan (SBP) Deputy Governor, Ms. Sima Kamil, the Central Bank had set targets of which at least 5% of their total lending portfolio need to be disbursed to the housing and construction sector by the end of year.
The Lahore Development Authority has started working on this scheme. Khyber Pakhtunkhwa, Balochistan, and Sindh has also initiated similar projects on low cost housing. Moreover, the refinancing by PMRC to banks has increased by Rs15billion in the first two and a half years of its operations.
