NBFCs allowed to take part in Apna Ghar scheme

Access to affordable housing finance is set to become easier for citizens, particularly underserved and non-banking segments, as the federal government has approved the inclusion of lending Non-Banking Finance Companies (NBFCs) as participating financial institutions under the Prime Minister's Apna Ghar Programme.

The Securities and Exchange Commission of Pakistan (SECP), recognising the potential of NBFCs to expand housing finance, proposed their inclusion in the programme.

"The initiative will not only enhance the availability of housing loans but also strengthen the role of NBFCs in Pakistan's financial sector," said a press release issued by the SECP on Saturday.

Under the scheme, the non-banking housing finance companies and investment finance companies will provide housing loans of up to Rs10 million, while microfinance companies will offer loans of up to Rs5 million.

The inclusion of NBFCs will provide people with additional channels to access subsidised housing finance, especially those with limited access to traditional banking services. With their wider outreach, flexible financing models and focus on underserved customers, the NBFCs are expected to help more families move towards owning their first homes.

The Apna Ghar Programme aims to promote affordable housing by providing mark-up subsidies and risk coverage for housing finance. Under the scheme, the eligible first-time home buyers can obtain loans for a maximum period of 20 years at a subsidised mark-up rate of 5% for the first 10 years.

To facilitate effective implementation, the SECP has introduced a comprehensive regulatory framework enabling eligible lending NBFCs to provide housing finance directly through their own resources or in collaboration with other NBFCs, commercial banks and development finance institutions.