In light of the pressing need to enhance the availability of adequate housing in Pakistan and recognize the pivotal role of the construction sector in stimulating economic activities, the Government of Pakistan has embarked on an ambitious journey to significantly increase the number of housing units in the coming years. This vision not only aims to address the housing shortage but also seeks to boost economic growth by creating employment opportunities and driving investment in related industries.
State Bank of Pakistan’s Supportive Measures
Since July 2020, the State Bank of Pakistan (SBP) has been actively involved in supporting the provision of financing for the housing and construction sector. One notable initiative introduced in October 2020 is the Government Markup Subsidy Scheme, popularly known as the Mera Pakistan Mera Ghar (MPMG) markup subsidy Scheme. This scheme, available in both conventional and Islamic modes, enables banks to provide financing for the construction and purchase of houses at highly subsidized financing rates, specifically targeting the low to middle-income segments of the population.
To further bolster this initiative, the government has continually refined the features of the MPMG scheme based on stakeholder feedback. The liberalization of the scheme in March 2021 aimed to extend its benefits to a larger portion of society, aligning with the government’s vision of inclusive economic growth.
Key Features of Mera Pakistan Mera Ghar Scheme
Under the MPMG Scheme, financing can be availed for various purposes including purchasing a house, purchasing a plot and constructing thereupon, extending a pre-owned housing unit, or constructing on an already-owned plot. Eligibility criteria ensure that all Pakistanis with valid CNIC and NICOP, particularly first-time house owners, can benefit from this scheme. Additionally, for projects under the Naya Pakistan Housing and Development Authority (NAPHDA), eligible candidates are shortlisted by NAPHDA and forwarded to banks for financing upon request.
Loan Terms and Financing Rates
Customers have the flexibility to choose financing tenors ranging from 5 to 20 years. Financing is available under two categories: for NAPHDA projects and non-NAPHDA projects. The maximum financing amount under the scheme is Rs. 2.7 million, with specific criteria regarding the size and type of housing unit. Notably, the financing rates are highly subsidized, with tiered rates for different periods, ensuring affordability for borrowers.
SBP’s Regulatory Initiatives
The SBP has undertaken several regulatory measures to create a conducive environment for financing under the MPMG Scheme. These include relaxation of the Debt Burden Ratio (DBR), exemption from certain income verification requirements, and standardization of loan application and property documentation processes. Additionally, technological solutions have been developed to streamline the credit approval process and enhance data acquisition from primary sources.
Support Mechanisms and Complaint Resolution
To facilitate applicants and address any grievances, the SBP has established a comprehensive complaint resolution mechanism. This includes an online complaint management system and help desks across the country. The complaint resolution time is set at a maximum of 8 working days, ensuring prompt redressal of issues faced by applicants.
Helpline: +92 (0) 3377786786
The MPMG Scheme represents a significant step towards fulfilling the government’s vision of increasing housing availability and fostering economic growth in Pakistan. With supportive measures from the SBP and concerted efforts from various stakeholders, this initiative is poised to make homeownership more accessible to a wider segment of society, thereby contributing to the overall development and prosperity of the nation.