KARACHI: The State Bank of Pakistan (SBP) Governor Dr Reza Baqir called a meeting of major banks on Wednesday to discuss sustainable market-led financing of housing projects and mortgages and other measures proposed by the Naya Pakistan Housing and Development Authority (NAPHDA), according to a statement issued on Wednesday.
It was decided that banks, NAPHDA, and SBP would work together to prepare an overall roadmap and execution plans with support from the relevant sub-committees of Pakistan Banks Association.
The meeting was attended by the NAPHDA Chairman Lieutenant General Anwar Ali Haider, and banks’ respective presidents. Members of a government think tank were also present, including former finance minister Shaukat Tareen, and businessmen Arif Habib and Aqeel Karim Dhedhi.
Baqir said that housing finance has not only remained under-developed in Pakistan as compared with other emerging economies, but had seen little progress over time.
He dubbed the initiative as being of great national interest. He emphasised that the construction and housing sectors have strong linkages with the rest of the economic sectors and offer a commercially viable and long term business proposition for banks. He also stressed that supporting economic activity in these sectors would support economic growth and employment in current times of economic stress.
He encouraged banks to view housing and construction finance as an opportunity to broaden their balance sheet and cater to the huge financing needs of the sector. Baqir reiterated the central bank’s commitment to play a facilitative and supportive role while also supporting a healthy credit culture in the country.
The NAPHDA chairman made a presentation to the banks on key features of the Naya Pakistan Housing Programme, and shared details of the underlying development model.
Shaukat Tareen presented a financial model, elaborated the incentives offered by the government, and emphasized that these will make the financing of developers and mortgages commercially attractive for banks.