KARACHI: The House Building Finance Corporation (HBFC) has reduced its annual losses to Rs28 million in 2009 from Rs385 million in 2008.
CEO and MD of HBFC Azhar Jaffri said this at a press conference at a local hotel on Friday. This has been possible because of HBFC’s new three pronged strategy that is prudent lending, expense control and robust recovery, he said.
“We have now improved our financial conditions. The three pronged strategy has worked and we will follow it aggressively in 2010 and 2011,” he said, adding the extraordinary high Non Performing Loans (NPLs) which rest at 41 per cent of total portfolio actually forced HBFC to reduce fresh lending and work for stabilization of organisation.
“We have stabilised the institution and now we are ready to take off,” Jaffri said.
When asked why HBFC reduced its loans in year 2009 to just Rs750 million, he replied, “It is the prudent lending policy of HBFC, which restricted fresh loans in 2009 to Rs750 million as compared to Rs3-4 billion a year.
On our second strategy point of expense control, we have reduced 10 percent of our budgeted expenses and are now ready to take-off for the enhanced disbursement of targets of 2010, he said. Thirdly, despite adverse economic conditions, HBFC has collected Rs3.5 billion against the target of Rs3.2 billion because of the robust recovery policy in 2009, he added.
In reply to a query, Jaffri said, our target of catering lower and middle income group is still in focus and 94 per cent of our total loans go to around Rs600,000 category. “We are not catering only big builders, which is why HBFC is being criticised by builders. Recently we have signed MoUs with reputed NGOs to disburse loans to lower and middle income groups,” said Jaffri. We are open to all builders. What we want is genuine people so that the increasing backlog in Pakistan can be reduced, for which we are engaging in all possible private and public sector collaborations, he added.
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