MPMG scheme: banks receive requests worth Rs200bn
KARACHI: Banks have received requests worth Rs 200 billion for low-cost housing until October 18, 2021 under the Mera Pakistan Mera Ghar (MPMG) program.
According to the State Bank of Pakistan (SBP), on the applications received, the banks have approved funding of Rs 78 billion and some Rs 18 billion has already been disbursed from the approved files.
As a result, housing and construction loans from banks reached Rs 305 billion at the end of September 2021, against Rs 166 billion at the end of September of last year, an increase of Rs 139 billion and an annual growth of 84 percent.
In July 2020, the State Bank of Pakistan advised commercial banks to increase their loans for the housing and construction sectors to at least 5% of their advances to the domestic private sector by December 2021. For y contribute, the State Bank advised a quarterly target for each bank. after individual consultation, leading to concerted efforts.
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The focus on this segment increased and for the quarter ending September 30, 2021, banks achieved 94% of their assigned targets on a consolidated basis. Between July and September 2021, banks increased their loans to the housing and construction sector by Rs 48 billion, against Rs 257 billion on June 30, 2021.
The increase in credit to the housing and construction sector reflects that banks have realigned their internal political dimension / strategic orientation towards housing and construction development. Banks have, in recent months, reorganized their systems and procedures, modernized and streamlined their technological platforms and motivated their banking staff through incentives and training.
Governor of the State Bank of Pakistan, Dr Reza Baqir appreciated the progress made by the banking sector in supporting low cost housing finance for new owners under the Mera Pakistan Mera Ghar (MPMG).
At the same time, the governor stressed the need to step up the pace of approvals by banks to match funding requests to ensure that people are not put off by the processing time. He expressed the hope that with the combined efforts of all stakeholders, the dream of Pakistanis of having their own home can become a reality.
While appreciating the efforts, Governor Baqir also called on stakeholders to increase the reach of the Government’s Beaconing Grant Program for Housing Finance, commonly known as Mera Pakistan Mera Ghar (MPMG) among the general public. He said when MPMG’s journey began last year, low-cost housing finance was almost non-existent as commercial banks rarely ventured into this area fearing its inherent risks.
However, the strong commitment of the government, especially NAPHDA, SBP, banks and other stakeholders, to promote housing and construction activities in the country is starting to lead to a considerable increase in housing finance and construction. construction. To increase this effort, the SBP has provided a favorable regulatory environment to promote housing and construction finance.
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The banks have also set up a common call center to answer questions from the general public regarding MPMG, which was recently inaugurated by the SBP governor. This call center will help resolve complaints and assist ordinary people who want to borrow under MPMG but find it difficult to meet bank requirements.
Previously, the State Bank launched a user-friendly online complaint resolution mechanism in January 2021. The complaints resolution mechanism includes an IT portal supported by a comprehensive network of employees of the State Bank and commercial banks to support issues encountered by requesters and resolve complaints within a predefined timeframe with an appropriate escalation mechanism.
Some of the other actions taken by the SBP in collaboration with NAPHDA, other government agencies, banks and stakeholders include a simplified loan application, a standard facility offer letter, an amendment to the prudential framework, the development of criteria standard risk assessment for builders / developers, income replacement model development and simplified financing documents.
Copyright Business Recorder, 2021