With the full support of the government and many initiatives of the State Bank of Pakistan, bank funding for the government’s flagship markup subsidy scheme e.g. Mera Pakistan Mera Ghar (MPMG), has increased.
Banks have authorized about Rs 59 billion in housing loans under the MPMG scheme since its launch. Disbursement under MPMG, which was initially delayed due to variables such as housing availability, has also increased up.
By August 31, 2021, the scheme had disbursed Rs 11.5 billion, an increase of Rs 3.8 billion or 49% (Charts 1a – 1c).
| Chart 1(a)-Mera Pakistan Mera Ghar Amount Requested for Financing Cumulative Rs Billion | Chart 1(b)-Mera Pakistan Mera Ghar Amount of Financing Approved Cumulative Rs Billion |
To date, banks have approved 38% of applications and disbursed 19% of approved amounts. These ratios have risen in recent months as banks have invested in procedures and technology to handle applications for low-cost housing (Charts 2a – 2b). Banks distributed funds at various stages of construction or purchase. So distribution depends on construction and purchase procedure completion.
To facilitate the scheme, SBP has introduced a standardized and simple application form, adopted an informal income assessment model, relaxed prudential regulations, established helpdesks at all SBP field offices, and designed a complaint portal supported by a network of all banks’ focal persons across geographical areas. On behalf of SBP, over 8,000 specialized branches across the country are accepting MPMG applications. SBP has also assigned targets to each MPMG bank. Each bank has an e-tracking system and a shared call center for applicants. NAPHDA and the Pakistan Banks’ Association (PBA) firmly support MPMG. With the continued efforts of SBP, Government, and Banks, bank financing for MPMG is expected to pick up.