KARACHI: Governor State Bank of Pakistan (SBP) Dr Reza Baqir on Wednesday said housing finance has not only remained underdeveloped in Pakistan, as compared to other emerging economies, but it has also seen little progress over time.
According to a statement issued by the central bank, the governor SBP said this during a meeting with the top officials of the commercial banks, called to deliberate on the measures proposed by Naya Pakistan Housing and Development Authority (NAPHDA) and identify a way forward to ensure sustainable market-led financing of housing projects and mortgages.
“In this regard, therefore, this initiative (Naya Pakistan Housing Program) is of great national interest,” the governor said.
He emphasised that the construction and housing sectors had strong linkages with the rest of the economic sectors and offered 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 particularly employment in current times of economic stress.
Baqir 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. He reiterated the central bank’s commitment to play a facilitative and supportive role, while also supporting a healthy credit culture in the country.
Chairman NAPHDA, in a detailed presentation on the key features of Naya Pakistan Housing Program, shared the details of the underlying development model for the successful implementation of the initiative. Complementing the presentation, Shaukat Tarin, member of the government’s think tank, presented a financial model and elaborated the incentives being offered by the government and emphasised these would make the financing of developers and mortgages commercially attractive for banks.