House Building Finance Corporation (HBFC) sanctioned 2,688 cases under its "Ghar Aasan Scheme" and approved Rs 1,067 million for the purpose, out of which Rs 996 million disbursed during 2004 up to May.
This was stated by Managing Director HBFC, B. H. Qureshi while addressing a press conference on Saturday.
Under the Shandar Ghar Scheme, Qureshi informed that the corporation approved 1,062 cases and sanctioned Rs 240.697 million out of which Rs 235.546 million were disbursed up to the month of May during 2004.
He said since its inception, the HBFC has invested Rs 31 billion in the construction of 0.450 million houses and present investment stood at Rs 20 billion with Ghar Asan and Shandar Ghar schemes being encourageously responded by people.
MD HBFC recalled that in the early years of its establishment, this organisation had to face many financial and management constraints. The meager resources of fund raised through sale of government guaranteed debentures always fell short of actual requirement for providing loans.
Housing which was relegated to low priority was one of the reasons for non-procurement of enough funds even at the then bank rate. It was after 1972 that the government allowed credit line through State Bank of Pakistan and loan under annual development plan thereby augmenting the resources of HBFC to meet the demand of house building loans.
Speaking about operational activities, B. H. Qureshi said that since its inception in 1952 to-date, the corporation has provided bulk loan/investment of Rs 1,759.900 million to 28 development authorities/public and private sector organisations for development of sites and construction of houses. The corporation also provided about 311,806 flood relief loans aggregating Rs 600 million for repair and reconstruction of houses damaged by flood and heavy rains.
Referring to Ghar Aasan Scheme, B. H. Qureshi said that in December 1999, the Supreme Court in famous Riba case declared some of the provisions of HBFC Act repugnant to Shariah and directed the federal government to make amendments/modification in HBFC Act.
Accordingly HBFC (Amendment) Ordinance was promulgated on November 23, 2001, after which HBFC prepared Ghar Aasan Scheme in compliance of Supreme Court decision which is based on "Diminishing Musharaka".
The scheme was implemented in March 2002 and so far approved investment of Rs 3,367.633 million in 11,059 cases. He highlighted the salient features of new scheme.
He said to broaden the scope of construction activities, HBFC introduced another scheme called Shandar Ghar scheme.
He pointed out that under this scheme, a fixed rate of interest is charged at 12.5 percent but in the first two years only five-percent interest rate is charged.
To a question, Qureshi informed that other banks charge interest at floating rate of 8 or 9 percent which, however, keep going up with the passage of time. He claimed that the facility being provided by HBFC is not available with another financial organisation.
He told a questioner that loan under Aasan Ghar scheme is sanctioned within seven days provided the conditions as laid down are fulfilled.
He said that for construction of a house, the applicant must have a leased plot and his age should be below 60 years.
Replying another question, MD HBFC said that at present the corporation's recovery stands at Rs 3 billion annually, out of which Rs 2 billion are disbursed as loan.
To a question, he said that HBFC does not give loan to builders but to individual allottees through the builder.
He said the builders have no complaint with us, as some of the builders were not sanctioned loans because their plots were freezed by the government for their not being leased property. He said whenever they would get their plot unfreezed, the HBFC will have no objection in granting loan to them.
Replying a question, Qureshi informed that incidence of fraud in HBFC is almost ignorable as it was only at one percent. He rebutted the impression of any corrupt practices in the corporation.
He said an applicant might try to bribe an employee at the lower level to get his work done if he is not fulfilling the required formalities. But at the upper level, there is no question of corruption.
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