Agreements worth Rs4.8bn signed for low-income house financing

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ISLAMABAD: In a ceremony held at the Pakistan Housing Conference, the Pakistan Mortgage Refinance Company Limited, in the presence of Prime Minister Imran Khan and officials of the World Bank Group, signed agreements and memorandums of understanding worth Rs4.8 billion for low-income house financing.

These were signed with House Building Finance Company, Askari Commercial Bank, First Woman Bank, BankIslami and Khushali Microfinance Bank.

During the conference, the prime minister told the audience that providing five million houses in five years is indeed an ambitious target keeping in view the lack of necessary infrastructure and inefficient foreclosure laws due to which banks are reluctant to provide mortgage loans.

“However, the government is fully determined to meeting the existing demand of 10 million houses in the country for which it is working closely with State Bank of Pakistan and World Bank so as to resolve implementation challenges,” he added.

World Bank Country Director Illango Patchamuthu said on the occasion that in Pakistan, it took around 25 years for an individual to own a house compared with five years in the international market.

He further said that the World Bank had made available $140 million for house financing through PMRC. He lauded the performance of PMRC and assured of further facilitation to meet the increasing demand.

“PMRC is a joint initiative of SBP, government and the World Bank Group established with the objectives of increasing affordable housing finance, especially for the low and middle-income groups; providing mortgage finance through banks, DFIs and housing finance companies and development of capital markets with fixed-rate long-term bonds and sukuks,” said PMRC Managing Director and CEO Mudassir H Khan.

PMRC started its commercial operations in November 2018 and within a very short period of time has created a unique position in the financial sector. It is 51pc owned by private commercial banks whereas 49pc by the government/public sector. PMRC will soon launch its fixed-rate bonds to generate further liquidity from capital markets. This will not only increase lending to financial institutions for further extending mortgage loans but will also provide an alternative asset class for investors to reap attractive risk-adjusted returns, besides providing diversification benefits to their investment portfolios.