BOP signs up with six MFIs to promote low-cost housing finance

The Bank of Punjab (BOP) has taken onboard six microfinance institutions within the Punjab Microfinance Network in a bid to extend financing for low-cost housing and agriculture to up to Rs10 billion.

This was revealed by BOP Chief Executive Officer (CEO) Zafar Masud in an interview with Business Recorder published on Monday.

“I am a big supporter of MFIs. I believe commercial banks or even microfinance banks cannot do low-cost housing alone. You need to form an alliance with those who understand these borrowers and can handle them through the approach of cooperatives and social collateral,” he said.

On facilitative measures with regard to informal sector borrowers, he said, “We have already signed a memorandum of understanding with REALL whereby we will work together in Pakistan and they will provide first loss guarantee to informal sector borrowers.”

When asked about the bank’s diversification plans, the BoP president said they are mulling to set up an insurance company – both life and general – jointly with the Punjab government. “People usually go general insurance first and life later; we will go the other way round: life insurance first and non-life later. So, Punjab Insurance is one idea we are working on; it will be a joint venture between us and the GoPb & its entities.”

In addition, he said, the bank is also at an advance stage of entering into microfinance sector, adding that BOP will soon be advertising its interest in conducting due diligence for acquiring strategic stake in a microfinance bank.

“Both these sectors are strategic sectors for us, and we would be looking to take positions in any and all projects which are important for our franchise/stakeholders/shareholders and the country.”