KARACHI: The World Bank and National Bank of Pakistan (NBP) have strategized to boost the housing finance sector in the country.
A World Bank delegation called on the President and CEO of NBP Saeed Ahmad. The World Bank team was led by Ms. Korotoumou Ouattara, Senior Financial Sector Economist, Adrey Milyutin, Senior Housing Finance Specialist, Ms. Nouma Dione, Financial Sector Specialist and Olivier Hassler, Housing Finance Adviser. The delegation also included representatives of PMRC (Pakistan Mortgage Refinance Company) including N. Kokularupan, MD & CEO, Dr. Muhammad Saleem, Chief Operating Officer and Syed Ali Adnan, Head of Treasury.
An NBP statement on Wednesday said that the meeting was to discuss overall growth of the Housing Finance Market in Pakistan, its issues, challenges and possible solutions. The World Bank team apprised that in coordination with key stake holders they were proposing to assist Pakistan for development of this market and were preparing a Housing Finance Project.
This Project will provide support to expand conventional mortgage lending, support to increase lower-income housing finance and capacity building and technical assistance for housing policy.
In addition, PRMC was also talking to banks for providing support for on-lending.
Saeed Ahmad, CEO & President NBP gave an overview of the challenges that Pakistani Housing Finance Market was facing including Recovery and Foreclosure laws, infrastructure, cost of funding and affordability.
He emphasized that affordable housing segment offers an opportunity to financial sector to expand its portfolio on a secured and profitable basis.
This will help further improve other industries, generate employment and contribute to growth on an ongoing basis. Together with this, a public/private partnership to tackle housing solution for low income segment of the society will help solve housing problem and eliminate Slums (Kutchi Abadis) which are creating various social problems including unlawful activities. ‘With my association with PMRC as a Chairman in the past, I would suggest PMRC to take a lead to create schemes which could benefit all stakeholders, and provide business opportunities for PMRC’.
He also emphasized on the important role of the World Bank in developing social and affordable housing for low income segments through innovative techniques and mentioned that the Housing Finance study earlier conducted had pointed to a shortage of 7 million housing units in the country a few years back which may now have exceeded 10 million.
Ahmad, CEO & President NBP also pointed out that specialist housing finance institution does not seem to be playing its due role and should be strengthened with sufficient capital, management and technical resources.
He said that this sector required special focus to overcome these challenges where Islamic banks and Islamic financing products could prove to be pivotal in its development. Ms. Korotoumou Ouattara from World Bank explained the importance of the changes that the Housing Finance project aims at triggering, starting with fixed rate lending and increased lending to households particularly low-income segment. She also stressed on the importance of this sector and its overall contribution towards county’s economic development. N. Kokularupan, MD & CEO from PMRC-Pakistan Mortgage Refinance Company Limited, explained to the forum, the role of the company in establishing and promoting fixed rate mortgage market, reducing maturity mismatch risk for banks and in the development of local capital market through regular issuance of conventional and Islamic debt instruments. He explained that their current discussions with banks including NBP included use of these instruments as well as working with Developers to overcome challenges of housing titles/ ownership.
He mentioned certain other challenges being faced by PMRC in starting its operations. The President NBP assured the World Bank team as well as PMRC management of his fullest cooperation in working with them for overcoming the challenges and providing all possible support for development of housing finance in Pakistan. PMRC along with World Bank is planning to sign a MoU in the near future with National Bank of Pakistan along with other commercial banks to implement the above mentioned strategies in Pakistan’s financial sector.
On behalf of National Bank of Pakistan, this meeting was spear headed by Saeed Ahmad, the President& CEO NBP along with Mudassir H. Khan, SEVP/Group Chief Payment Services & Digital Banking Group, Ms. Sultana Naheed SEVP/Group Chief Credit Management Group, Rehmat Ali Hasni, SEVP/Group Chief Investment Banking Group, Aasim Akhtar, SEVP/Group Head Commercial & Retail Banking Group and other key executives.
