Mortgage Loan Approved By World Bank For Pakistan Housing Finance Project
Mortgage Loan Approved By World Bank For Pakistan Housing Finance Project: Low cost home not a problem, World Bank has approved a loan of $145 million. Nearly a third of country’s population does not own homes and this pressure is rising with growing demand.
The Aim of this Loan is
- At expanding homeownership, including women and the poor through access to affordable house building loans.
- It will make housing finance affordable and reachable to many Pakistanis.
- beneficiaries would include women and low-income groups through improved incentives for eco-friendly homes.
- It will also give incentives to people to build energy efficient and green homes and adopt climate and disaster resilient construction designs and materials.
World Bank Report on Pakistan Housing Situation
The World Bank said estimated housing shortage in Pakistan is up to 10 million units, of which about 40% occurs in urban areas. Over the next 20 years, annual increase in urban population is expected to be about 2.3 million per year.
- A decline in the family size and increased household formation rates are expected to further increase the demand for housing.
- The quantitative housing shortage is intensified by qualitative deficits such as overcrowding, low quality and continuous deterioration.
- Around 47% of urban households live in substandard housing, often located in informal settlements called ‘Katchi Abadis’
- Household lack basic urban infrastructure and have poor health conditions. Existing housing stock is also extremely overcrowded.
Pakistan’s much lower rate of investment, compared with an average of 34% in South Asia, is driven by its security situation, energy shortages and poor business regulatory environment. In 2016, assets in the financial sector stood at about 69% of GDP, below that of other relevant emerging markets.
Pakistan Housing Financing Project (PHFP)
Pakistan Housing Finance Project support the government of Pakistan’s vision and strategy for housing development.
- The PHFP will extend financial and technical assistance to Pakistan Mortgage Refinancing Company (PMRC), the Planning Commission, and other institutions to increase availability of mortgage financing for households.
Pakistan Mortgage Refinancing Company (PMRC)
In 2016, the government had created PMRC, a mortgage refinancing facility. Periodic progress is being made on the issues and strengthening of the property registration system, for example, through the ongoing land record management information system (LRMIS) project in Punjab and computerization efforts in Karachi.
- The PMRC was launched to assist the development of housing finance in the country and aid financial institutions for extending housing loans by addressing their liquidity issues through refinancing facilities.
- to create an enabling environment for a sound national housing policy.
This enhanced availability coupled with low markup rate regime, has increased the housing finance portfolio of Pakistan significantly to Rs.58 billion, a growth of more than 9% in a year. Through this project the development of housing mortgage market in the country will grow.
Mortgage Loan Approved By World Bank For Pakistan Housing Finance Project