ISLAMABAD: The government yesterday announced a Rs20bn credit scheme for poor to buy low-cost housing units.
Unveiling the salient features of the scheme, the finance minister said banks and financial institutions would provide loans of up to Rs1m under this scheme while the government would guarantee 40 per cent of the portfolio amount.
Loans will be provided to 25,000 low and middle-income families through this innovative scheme. Describing housing as a basic need, Finance Minister Ishaq Dar said the government owes it to its people to facilitate provision of housing.
Giving details of the initiatives being planned to promote housing sector, he said a Mortgage Refinance Company was being established with a broad shareholding of the Government of Pakistan, commercial bank, development finance institutions, multilaterals and others for this purpose, to generate long-term liquidity for housing finance.
Total paid up capital of the company would be Rs6bn.
The company will provide refinance facilities through purchases of loans from the financial institutions engaged in loan origination and packaging them for sale to long-term investors. The government will invest Rs1.2bn in the equity of the company.
Dar said House Building Finance Company Limited (HBFCL) has been the premier for providing housing finance to low and middle-income families.
There is an urgent need to rehabilitate this institution to enable it to play its important role in the housing sector.
He said the HBFCL will be restructured and its board of directors will immediately be formed. Internews
