WASHINGTON: The World Bank (WB) has approved $145 million for Pakistan to let people of the country have access to affordable houses through mortgage financing.
The Funds are to be allotted under the Pakistan Housing Finance Project (PHFP) and will finance the government’s plan to develop the housing sector in Pakistan especially to cater women and low incomes get house ownership
“This project will spur the development of housing mortgage market in the country and make housing finance affordable and reachable to many Pakistanis,” said Illango Patchamuthu, World Bank Country Director for Pakistan. “The beneficiaries will include women and low-income groups through improved incentives for eco-friendly homes.”
According to the estimates, nearly 1/3 of the country’s population do not own homes while the demands keep increasing.
According to a statement, the project will extend financial and technical assistance to Pakistan Mortgage Refinancing Company (PMRC), the Planning Commission (PC), and other institutions to increase the availability of mortgage financing for households.
“Pakistan’s mortgage finance to gross domestic product ratio of 0.25 percent is extremely low compared to the South Asia average of 3.4 percent,” said Korotoumou Ouattara, World Bank Senior Financial Sector Economist.
He believes that there is a significant market gap across all the segments of the population and the initiative of PMRC will further increase the Pakistani Government’s objective to provide access to housing finance in the country.
“The project will address the liquidity constraints of lenders, support capital market development, and create an enabling environment for a sound national housing policy.”
It also incentives people to build energy efficient and green homes and adopt climate and disaster-resilient construction designs and materials.
The project is being financed by the International Development Association, the World Bank’s fund for the poor, with a maturity of 25 years, including a grace period of 5 years.
Pakistan has received $42.7 billion in assistance, which includes $33.4 billion in loan and credits and $9.3 billion in grants since it became the member of the world body in 1950.
Pakistan receives financing support from the International Bank for Reconstruction and Development (IBRD) and concessional financing from the International Development Association (IDA).