Housing finance: MRC formation would help long-term funding

SBP deputy governor chairs first meeting of steering committee

KARACHI: State Bank of Pakistan (SBP) Deputy Governor Saeed Ahmed has said non-availability of long-term liquidity does not allow requisite growth in housing finance in the country.

According to a statement released by the SBP on Tuesday, Ahmed said this while chairing the first meeting of the Steering Committee of Mortgage Refinance Company (MRC) held on October 13 at the SBP.

While other key issues like foreclosure laws, land record system and stamp duties are being handled separately by authorities concerned, Saeed said the formation of MRC under public-private-partnership model will help in the provision of long-term funding to primary mortgage market and development of the secondary market in Pakistan.

He said significant progress has been made during 2014, as the feasibility report of MRC has been revalidated by independent international consultants and firm equity commitments have been secured from the government and commercial banks/development finance institutions (DFIs).

Ahmad also clarified that MRC will work on the with-recourse model, which will ensure that its financial health is not affected in case of default by mortgage borrowers. MRC will also help in the development of capital markets by issuance of corporate bonds/term finance certificates and sukuks, he said. The deputy governor also set the end-of-December deadline for the incorporation of MRC with the Securities and Exchange Commission of Pakistan.

Published in The Express Tribune, October 15^th, 2014.

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