Banks approve Rs59 billion in housing loans: SBP

Banks approve Rs59 billion in loans under the government’s housing scheme: SBP. Until the end of August, banks granted nearly Rs59 billion under the government’s flagship housing subsidy scheme Mera Pakistan Mera Ghar.

SBP announced on Wednesday that financing for the housing finance plan had picked up speed due to many measures taken by the bank and government support.

The SBP stated that since the scheme’s inception last year, banks had received applications totaling Rs154 billion and authorized funding totaling more than Rs59 billion as of Aug 31 this year. Similarly, the speed of disbursement, which had initially been slow due to various issues, has increased, it added.

Applications are being accepted from over 8,000 locations. By the end of last month, disbursements under the scheme had reached Rs11.5 billion, indicating a growth of around Rs3.8 billion or 49% in August 2021. “On average, banks have granted 38% of total applications and released 19% of approved amounts,” the central bank added.

In recent months, these approval and disbursement ratios have also increased as banks have made the necessary upfront investments in procedures and technology to handle low-cost home applications.

Banks disbursed funds at various stages of construction or acquisition. As a result, the payment rate is based on the completion of construction and the procurement procedure.

Read more with EL news : The KP government reclaims Rs60 billion inland from encroachers

Since the scheme’s announcement last year, the SBP has taken several enabling steps. It includes introducing a standardized and straightforward application form; adopting an informal income assessment model; relaxing prudential regulations; establishing help desks in all of its field offices; and designing a complaint portal supported by a network of focal persons representing all banks across all geographies.

Banks are accepting applications from over 8,000 specialized branches across the country on the SBP’s guidelines. Additionally, the central bank has assigned targets to each bank participating in the scheme. Additionally, each bank built an electronic tracking system and a specialized shared call center to assist applicants. The initiative is entirely supported by the Naya Pakistan Housing Development Authority and the Pakistan Banks’ Association, a trade association for banks.

The central bank anticipates that, as a result of continuous efforts by it, the government, and banks, bank financing for the plan will acquire additional traction in the coming days.

However, the building sector is highly doubtful of the housing scheme’s effectiveness on a broad scale, as the construction cost has increased significantly due to inflation and devaluation of the local currency.

Keep up with Estate Land Marketing for news and updates.