The Chief Executive Officer of Pakistan Credit Guarantee, Dr. Muhammad Saleem has disclosed that housing is a key subject in Pakistan, stressing that concerted efforts are being exerted to provide affordable housing.
The CEO made the remark on Monday during a virtual meeting with the Housing Development Advocacy Network (HDAN).
While sharing his success story in the area of mortgage refinance in Pakistan, Saleem averred that the nation has a federal housing ministry that focuses on promoting affordable housing.
He noted that each parental government have their own housing departments to promote affordable housing in the housing sector, adding that they have their own legislation and rules dedicated to the housing sectors.
Saleem explained that the Central bankers have the major role to play in housing sector in Pakistan. “State Bank of Pakistan being a central banker Pakistan has a key role to promote housing finance in Pakistan,” he said.
Recounting his success story, Saleem said “I am proud to say that I was the first person who basically designed housing parental regulation to rent money today, mortgage bank wise”.
He continued that “Between 2008 and 2010 we trained around 800 commercial bankers in the area of housing finance. Previously, our commercial bankers were not trained in housing finance on how to receive application, how to mitigate this in housing finance area, what document they have to pass to the customer. So we trained them with the example I have seen in Canadian Mortgage Housing Corporation.
“And after that, this industry, the housing finance industry started picking up in Pakistan as well and so far we are improving. So you can imagine that once we have commercial bankers entering into this area and realizing the importance of housing sector, then realize that we should have our own mortgage refinance company. So I think I have a success story in this area as well. I designed the consent paper that we need to establish Pakistan mortgage refinance company and then our government approved that consent
“I established Pakistan Mortgage Refinance Company which is now providing money to the commercial banks so that they can lend to the end users”
He said the main idea objective was to promote fixed mortgage market in Pakistan and “secondly we can ensure housing balance and securities in the capital market”
“So one objective was to enhance primary mortgage market through commercial banking housing finance companies. Another objective was to develop our capital market for such unique housing delivery and so far this mortgage refinance company is doing very well.
“We developed the taste of the commercial banks and also we developed the market for housing finance company”.
According to him, prior to its inception, only commercial banks were allowed to lend to housing market, adding that “now we have allowed housing finance company to lend to the commercial banks as well and now this market is picking up”.
He stated that the government is taking several initiatives to incentivise bankers to lend to the housing sector. “Secondly, they have also given incentives to the developers so that they can design and develop and implement affordable housing projects in Pakistan”.
In his words, the initiatives are geared toward providing avoiding housing and reducing the housing deficit in the Nation.
