KARACHI
A World Bank delegation called on the National Bank of Pakistan President/CEO Saeed Ahmad. The World Bank team was led by Korotoumou Ouattara (Senior Financial Sector Economist), Adrey Milyutin (Senior Housing Finance Specialist), Nouma Dione (Financial Sector Specialist) and Olivier Hassler (Housing Finance Adviser).
The delegation also included representatives of PMRC (Pakistan Mortgage Refinance Company) including MD & CEO Kokularupan, Chief Operating Officer Muhammad Saleem, and Head of Treasury Syed Ali Adnan.
The meeting was to discuss the overall growth of the housing finance market in Pakistan, its issues, challenges and possible solutions. The World Bank team apprised that in coordination with key stakeholders they were proposing to assist Pakistan for development of this market and were preparing a housing finance project. This project will provide (i) support to expand conventional mortgage lending; (ii) support to increase lower-income housing finance; and (iii) capacity building and technical assistance for housing policy. In addition, PRMC was also talking to banks about providing support for on-lending.
Saeed Ahmad gave an overview of the challenges that Pakistani housing finance market was facing including recovery and foreclosure laws, infrastructure, cost of funding and affordability. He emphasised, “Affordable housing segment offers an opportunity to the financial sector to expand its portfolio on a secured and profitable basis. This will help further improve other industries, generate employment and contribute to growth on an ongoing basis. Together with this, a public/private partnership to tackle housing solution for the low-income segment of the society will help solve housing problem and eliminate Slums (Kutchi Abadis) which are creating various social problems including unlawful activities. With my association with PMRC as a chairman in the past, I would suggest PMRC take a lead to create schemes which could benefit all stakeholders, and provide business opportunities for PMRC.”
He also emphasised the important role of the World Bank in developing social and affordable housing for low-income segments through innovative techniques and mentioned that the housing finance study earlier conducted had pointed to a shortage of 7 million housing units in the country a few years back which may now have exceeded 10 million.
Ahmad also pointed out that specialist housing finance institution does not seem to be playing its due role and should be strengthened with sufficient capital, management and technical resources.
Ouattara from World Bank explained the importance of the changes that the housing finance project aims at triggering, starting with fixed-rate lending and increased lending to households, particularly low-income segment. She also stressed the importance of this sector and its overall contribution towards county’s economic development.
Kokularupan from PMRC – Pakistan Mortgage Refinance Company Limited, explained to the forum, the role of the company in establishing and promoting fixed rate mortgage market, reducing maturity mismatch risk for banks and in the development of local capital market through regular issuance of conventional and Islamic debt instruments.
The NBP president assured the World Bank team as well as PMRC management of his fullest cooperation in working with them for overcoming the challenges and providing all possible support for the development of housing finance in Pakistan.
PMRC along with World Bank is planning to sign an MOU in the near future with National Bank of Pakistan along with other commercial banks to implement the above-mentioned strategies in Pakistan’s financial sector.
