Keeping in view the need to improve the availability of adequate housing in the country and the important role of the construction sector in boosting economic activities in other countries, the Government of Pakistan envisions increasing the number of housing units manifold in the coming years. It has taken several measures in this regard.
To support this vision of the Government of Pakistan, the State Bank of Pakistan has taken several measures since July 2020 to support the provision of financing for the housing and construction sector. In October 2020, the Government of Pakistan augmented these efforts by introducing the Government Markup Subsidy Scheme, now commonly known as Mera Pakistan Mera Ghar (MPMG) markup subsidy Scheme. Government liberalized features of the MPMG scheme in light of stakeholders' feedback to benefit the larger strata in March 2021.Available in both conventional and Islamic modes, this scheme enables banks to provide financing for the construction and purchase of houses at very low financing rates for the population's low to middle-income segments.
State Bank of Pakistan is the executing partner with the Government of Pakistan and Naya Pakistan Housing and Development Authority (NAPHDA).
 |
| Mera Pakistan Mera Ghar Scheme |
Eligibility
- All Pakistanis with valid CNIC and NICOP
- First-time house owner
- One individual can have a subsidized house loan facility under this scheme only once
- For Naya Pakistan Housing and Development Authority (NAPHDA) projects, NAPHDA will shortlist the eligible candidate and upon request of the candidate, will forward the candidate profile to banks for financing
Two types of loan can be availed:
From Microfinance Banks:
- Microfinance banks can provide up to Rs. 2 million financing to eligible borrowers
From Commercial Banks/DFIs:
- Financing of up to Rs. 10 Million can be availed under this scheme
- Financing amount is dependent on the size of residential unit
- Up to Rs. 6 Million financing can be availed for a house measuring up to 5 Marla (125 Square Yards) and for a flat/apartment with the size up to 1,250 Square Feet
- For a house measuring up to 10 Marla (250 Square Yards) and a flat/apartment up to 2,000 Square Feet, financing up to Rs. 10 million can be availed
Tier 1:
Borrower will be charged financing rate of
- 3 percent for first five years
- 5 percent for next five years
- KIBOR + up to 250 bps for the remaining financing tenor
Tier 0: For Microfinance Banks Borrowers
- Borrower will be charged financing rate of
- 5 percent for first five years
- 7 percent for next five years
- KIBOR + 700 bps for the remaining financing tenor
Tier 2: For Commercial Banks/DFIs Borrowers
- For financing a house measuring up to 5 Marla (125 Square Yards) and for a flat/apartment with the size up to 1,250 Square Feet, financing rate will be charged as follows:
- 5 percent for first five years
- 7 percent for next five years
- KIBOR + 400 bps for the remaining financing tenor
Tier 3: For Commercial Banks/DFIs Borrowers
- Financing to be availed for a house measuring up to 10 Marla (250 Squard Yards) and a flat/apartment up to 2,000 Square Feet, financing rate will be charged as follows:
- 7 percent for first five years
- 9 percent for next five years
- KIBOR + 400 bps for the remaining financing tenor
| Tier 0 | Tier 1 | Tier 2 | Tier 3 | ||||
| Financing Amount | Installment | Financing Amount | Installment | Financing Amount | Installment | Financing Amount | Installment |
| Monthly installment from year 1 to 5 | |||||||
| Rs. 0.5 Million | 3,300 | Rs. 1 Million | 5,546 | Rs. 1 Million | 6,600 | Rs. 6 Million | 46,518 |
| Rs. 1 Million | 6,600 | Rs. 2 Million | 11,092 | Rs. 3 Million | 19,799 | Rs. 8 Million | 62,024 |
| Rs. 2 Million | 13,199 | Rs. 2.7 Million | 14,974 | Rs. 6 Million | 39,597 | Rs. 10 Million | 77,530 |
| Monthly installment from year 6 to 10 | |||||||
| Rs. 0.5 Million | 3,751 | Rs. 1 Million | 6,351 | Rs. 1 Million | 7,501 | Rs. 6 Million | 52,492 |
| Rs. 1 Million | 7,501 | Rs. 2 Million | 12,702 | Rs. 3 Million | 22,503 | Rs. 8 Million | 69,990 |
| Rs. 2 Million | 15,002 | Rs. 2.7 Million | 17,147 | Rs. 6 Million | 45,007 | Rs. 10 Million | 87,487 |
*The installments have been calculated on the basis of financing tenor of 20 years. Installments for the period exceeding 10 years will be based on prevalent KIBOR at that time as per the conditions of scheme.
SBP Initiatives to Promote Financing Under MPMG
- State bank has taken various regulatory measures to create conducive regulatory environment, few of them are listed below:
- Relaxation of DBR in case bank rely on repayment surrogate for extension of financing
- In case of use of informal income estimation models, banks will be exempt from requirement of verifiable income only.
- Banks/DFIs are allowed to extend low cost housing finance against personal guarantee of a third party for a maximum period of one (01) year.
- Standardized loan application form
- Standardized Facility Offer Letter
- Standardized set of documents required for financing approval
- Standardized set of property documents required for disbursement of financing
- Punjab Government’s online portal for banks to verify
- Punjab and KPK’s on line portal listing approved projects
- Launch of online complaint management system for Government Markup Subsidy Scheme
- SBP developed an online complaint management system and made it live
- Complaint resolution time is maximum 8 working days
- Banks have nominated focal person in each region for complaint resolution
- All SBP BSC offices are also involved
- Implementation of standardized income proxy model developed by banks to facilitate housing finance to customers with informal sources of income
- Development and implementation of advanced Statistical scorecard Model for housing finance
- Pursuing banks to develop comprehensive statistical scoring model to ensure flow of formal housing finance to individuals employed in informal sector
- Development of technological solutions for acquisition of data from primary sources (telcos, utility companies, Government agencies, etc) to improve the traditional credit approval process to a scorecard and behavior pattern analysis
|
Participating Banks
