Banks have received applications for more than Rs200 billion under the “Mera Pakistan Mera Ghar” (MPMG) scheme, announced the State Bank of Pakistan (SBP) Governor Dr Reza Baqir. In a statement on Wednesday, the SBP governor said that banks had approved financing of Rs78 billion, out of which Rs18 billion had been disbursed.

Appreciating the progress on the MPMG scheme, the governor stressed the need for accelerating the pace of approvals by banks to match the financing requests. “This will ensure that people are not discouraged by the processing time,” he said.

The SBP governor asked the stakeholders to increase the outreach of MPMG – the government’s markup subsidy scheme for housing finance – to the wider public. He recalled that before MPMG, low-cost housing finance was almost non-existent as commercial banks rarely ventured into that area, fearing its inherent risks.

He was of the view that the government’s commitment, especially that of Naya Pakistan Housing and Development Authority, SBP, banks and other stakeholders to promote housing and construction activities, was bearing fruit with a considerable increase in financing for housing units and construction. To augment the effort, the SBP had provided an enabling regulatory environment to promote housing and construction finance, the central bank statement added.

He said that housing and construction credit from banks had reached Rs305 billion by September 2021 as compared to Rs166 billion in the same period of previous year, showing an increase of Rs139 billion and a year-onyear growth of 84%. In July 2020, the SBP advised commercial banks to increase their lending for housing and construction sectors to at least 5% of their private sector advances by December 2021.

To assist in this, the central bank advised quarterly targets to each bank after individual consultation, leading to concerted efforts, according to the SBP statement.