The State Bank of Pakistan (SBP) is planning to launch a lowcost housing scheme for widows, children of martyrs, special persons, transgender citizens and people severely affected by terrorism.
In this regard, the beneficiaries of the scheme will get a financing facility of up to Rs. 2.7 million from Islamic banks and Islamic banking divisions for housing units with a maximum limit of Rs. 3 million. The beneficiary will be required to buy a plot and construct a house on it but they should be first time owners and should never have availed any financing facility from any bank and financial institution.
The beneficiaries will repay the amount of financing in the next 12 and a half years including a maximum grace period of six months. The repayment of the amount will be made with a 5 percent additional amount.
The central bank has sought the interest of Islamic banks to participate in the longterm scheme of financing facility. It will assign yearly limits which shall be allocated to individual banks/DFIs under the scheme.
Under this facility, Mudarabah investment of SBP shall be available for up to 100% of the amount financed to eligible customers. SBP shall make Mudarabah investment in the general pool of the Islamic banks.
The incumbent government is working aggressively for providing lowcost housing to the people as it set a target for 5 million housing units in five years. The lowcost financing facility not only will bode well for the public but it will give a business opportunity to Islamic banks which are always in search of investment avenues. This scheme is longterm but a little risky for banks too.
The government should set up a regulatory body to ease the process of purchasing a house with an integrated and onewindow system of land record and registration, this will create an ecosystem for banks to come forward easily for such schemes.
Source: Pro Pakistan