Mortgage Refinancing Company (MRC) will be established with the initial investment provided by International Finance Corporation (IFC) of the World Bank and will be controlled by SBP. 20% of the initial investment would be provided by the government.
Director Infrastructure and Housing Finance Department, Mr.Rizwan Pesnani, of State Bank of Pakistan (SBP) said , “The MRC is being set up to build up the confidence of banks and financial institutions.”
He further added that the company would be made functional during the current year as its business plan had already been finalized. He said that the authority had to take positive measures for the proper implementation of recovery ordinance, which had caused the banks to commence disbursement of long term loans for housing sector fully, due to its absurd enforcement. MRC is to facilitate the masses at maximum, he said.
Syed Farhan Fasihuddin, Manager for Housing Finance Advisory Services at IFC, said that SBP and IFC have been working since 2005 for the development of MRC, moreover, MRC would help capital market, which would be launched latest by 2011. He said that in order to bring liquidity in the sector private commercial banks need to be trained for mortgage lending.
He mentioned that mortgage to GDP ratio of Pakistan is 0.7% presently, which is needed to be enhanced. He stated that it costs about eight times of the monthly income of a common person to construct a house.
Zaigham Rizvi, Consultant World Bank on Housing Finance in South Asia, said that WB has played a vital role in creating awareness regarding housing finance in the region. He informed, that newly established South Asia Housing Finance Forum portal,will be of great help in finding unique approaches to cater to the demands of the population. He added, the House Building Finance Corporation (HBFC) disbursed only Rs 700 million in 2009 and suggested the body of Abad to set up a research unit for establishing strong contacts with urban planners.
“So aesthetic and quality housing for the low-income group is a challenge that faces the whole of South Asia including Pakistan where builders need to meet the existing shortage of 8.8 million units,” he said.
Engr. Farooq-uz-Zaman, chairman Abad, said “while our annual demand of housing is 1.5 million we are constructing only 0.6 million.”
He further said, that the population residing in cities will be 65% by 2030, so the prices of houses should be catered down for the rising demand of population.
He said, “we have to transport the connection lines from the grid stations for our projects to that area even if it is 10 km away. And all this cost in borne by us, so we ultimately have to pass this cost to the buyer.”