KARACHI: As a result of numerous measures of the State Bank of Pakistan and full support of the government, bank lending for the government’s flagship markup subsidy scheme, commonly known as Mera Pakistan Mera Ghar (MPMG), has picked up momentum.

Since the launch of the scheme, applications of Rs 154 billion under MPMG have been received by banks and banks have approved housing finance of over Rs 59 billion up till August 31, 2021.

Similarly, pace of disbursement under MPMG that was initially slow because of a number of factors, including availability of housing units has also picked up. By August 31, 2021, disbursement under the scheme has reached Rs 11.5 billion, showing an increase of around Rs 3.8 billion or 49 percent in August 2021.

According to State Bank of Pakistan (SBP) data, the top 5 banks by approvals are Meezan Bank with approval of Rs 9.53 billion, Standard Chartered Bank Rs 9.49 billion, Habib Bank Limited Rs 5.08 billion, Bank Alfalah Rs 4.43 billion and The Bank of Punjab Rs 3.98 billion while by disbursements top 5 banks are Bank Alfalah with disbursement of Rs 1.31 billion, Meezan Bank Rs 1.22 billion, National Bank of Pakistan Rs 1.15 billion, Standard Chartered Bank with Rs 1.13 billion and BankIslami with Rs 0.78 billion.

On average, to date banks have approved 38 percent of amount applied and 19 percent of approved amount has been disbursed. These approval and disbursement ratios have similarly risen over the past few months as banks have put in place the needed upfront investment in procedures and technology to process applications for low-cost housing. It would be pertinent to mention here that banks disbursed amounts in different stages of construction or purchase. Thus the pace of disbursement is contingent upon the speed of construction and completion of purchasing process.

Since the announcement of MPMG scheme last year, the SBP has taken various enabling steps such as introducing standardized and simple application form; adopting informal income assessment model; providing relaxations in prudential regulations; establishing helpdesks at all the SBP field offices; and, designing a complaint portal supported by a network of focal persons of all banks across all geographical areas.

On the instructions of the SBP, banks are accepting MPMG applications from over 8,000 dedicated branches across the country. Further, the SBP has also allocated targets to each bank under MPMG. An e-tracking system within each bank and a dedicated joint call center for the facilitation of the applicants have also been established. Naya Pakistan Housing Development Authority (NAPHDA) and Pakistan Banks Association (PBA), a representative body of banks, are fully supporting MPMG.

It is expected that with the ongoing efforts of the SBP, government and banks, the bank finance for MPMG will gain further momentum.

Copyright Business Recorder, 2021