The House Building Financing Corporation Limited (HBFCL) is likely to roll back its operations due to liquidity problems. The corporation, which had been providing loans to people of average means to build their houses, is finding it difficult to meet the demand because it is now almost "cash starved."
Sources told Business Recorder on Monday that all operational activities, which were going on at a rapid pace until February, had almost stopped because of working capital crunch and mismanagement. They said that no official has been placed on the managing director''s post since February, and termed it a major factor behind HBFCL''s present financial crisis.
They said the tenure of M A Waheed, acting executive director, is about to end shortly and that he is not interested in overcoming the crisis. This has caused a negative impact on the business. They opined that if positive measures were not taken, the corporation would definitely wind up its all operations shortly.
They said that HBFCL has invested Rs 20 billion through different loan schemes, and added that recovery operations were not providing fruitful results because of ill management. "Instead of earning profit through these schemes, the corporation is carrying huge losses owing to slow recovery operations, excess overheads and inefficient management," they added.
To tie over the situation, the corporation has stopped sanctioning house building loans to both individuals and construction companies, they said, adding that applications for only small loans, ranging from Rs 200,000 to Rs 300,000 are being entertained.
They said that corporation has recruited over 200 professionals on lucrative salaries and was planning to remove those who were not capable to deliver desired results, but it could not implement that plan. This has led to cause over-expenditures, creating immense difficulties for the corporation.
They said that all loan facilitation services initiated in the past, including mobile loan service, etc, have been stopped because of over-expenditure. Sources said that HBFCL is targeting low and middle-income groups for constructing, purchasing and renovation of houses, and is working as housing bank for low and middle-income groups of population. They said that only 0.4 million houses are being constructed annually, while the country has annual demand of up to 0.7 million houses to meet the shortage of 7.5 million houses across country.
If HBFCL were to shut down its operations, shortage of houses would considerably be increased, which would directly reflect on raising the ratio of poverty and encroachments, scattering across the country, they feared. Interestingly, HBFCL quarterly report, which used to be made public on time, has not been issued yet. This has given birth to serious doubts about its financial position. The acting executive director could not be reached for his comments because he was out of town.
Comments
Comments are closed.