Business

Housing scheme not shelved permanently

Govt revising features due to changed economic scenario

Our Correspondent August 13, 2022

FILE

KARACHI:

The Mera Pakistan Mera Ghar (MPMG) scheme has not been shelved permanently as the government has decided to revise its features in light of the changed macroeconomic scenario.

It was stated by State Bank of Pakistan’s (SBP) Executive Director Development Finance Group (DFG) Samar Hasnain during the seventh episode of the SBP Podcast series.

Hasnain pointed out that the finance minister had constituted a committee comprising officials of the SBP and the Finance Division to study and review features of the scheme.

The new shape of the scheme, after having the government’s nod, is expected to be finalised and issued by August 31 this year.

Comparing the mortgage financing rate in neighbouring countries, he revealed that it was 10% whereas in other developing countries like Malaysia and Indonesia the rate was 20%. In developed countries, the ratio was more than 100%.

However, he regretted that in Pakistan the mortgage financing-to-GDP ratio was less than 0.5%.

He pointed out that the SBP had been working to improve the percentage of mortgage financing and two basic hurdles the sector faced earlier had been removed.

Hasnain dismissed the impression that the MPMG scheme was suspended due to the change in political scenario.

When MPMG was launched, the Karachi Inter-Bank Offered Rate (Kibor) was 8% and the margin for banks was 4% as the banks received funds at Kibor plus 4%, which initially was 12%.

Furthermore, the end-user received financing at 5% and the subsidy paid by the government was 7%. In recent months, Kibor increased and the government subsidy went up to 15%.

The government temporarily paused the scheme on June 30, 2022 to reconsider its features and make it more targeted to ensure that the benefits reach the low and middle-income households, who cannot afford to purchase or construct a housing unit without availability of subsidised financing.

Published in The Express Tribune, August 13^th, 2022.

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COMMENTS (1)

Ajmal Khqn | 2 years ago | Reply The decision of GOVT regarding MGMP is really nonsense..the end users paid advance token money bayana to the owners of house and submitted all doc to their concerned banks.the maximum time of such as advance is usually 2 month .almost the duration is completed .the applicants are now worry about their advance payment.govt should SBP should orders to all banks for releasing of payments who paid advance money for purchasing of house .further delay may effect on end users and they lost millions of ruppees.

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