Karachi: Housing industry demands affordable financial assistance
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11-21-2009, 04:52 AM
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Karachi: Housing industry demands affordable financial assistance
By our correspondent
KARACHI: There are unlimited opportunities for the expansion of the housing industry in Pakistan, but to achieve this, financial institutions have to play an active role, said Hussain Lawai, CEO of Arif Habib Bank. He said this in a meeting with the members of Association of Builders and Developers (ABAD) recently at ABAD House. Comparing loan cultures of Pakistan, Europe and the US, Lawai said 90 per cent of the houses in Pakistan are free from any loans, whereas 75 per cent houses in the US and Europe are mortgaged. That is due to the fact that the process of obtaining loans is very simple and when all formalities are completed the loan is sanctioned within three days. He said due to strict rules and regulations, recovery rates are quite high in these countries. Commenting on the economic situation of the country, he said the worst is over and all indicators are pointing towards a revival. Coming months would see substantial overall progress. The construction industry is providing employment to millions of skilled and unskilled workers, said ABAD Chairman Engr Farooq-uz-Zaman, adding that it is playing its due role for the betterment of the economy. In a situation where the backlog of housing units has reached 7.7 million, which is increasing annually, it has become pertinent to fill the gap between supply and demand. To achieve this goal, infrastructure has to be improved and financing facilities have to be expanded in order to increase the construction of housing units, he said. Under the current difficult circumstances, builders and developers are doing their best to carry out their social responsibility. The government should provide the housing sector with affordable financial assistance as it is the only sector which is functioning without loans. ABAD Vice Chairman Muhammad Arif Siddiq said only a few banks are providing limited short-term financing for housing, and the House Building Finance Corporation (HBFC) was the only institution providing long-term finance. However, for the last one year, HBFC has stopped disbursing loans. Banks should divert their attention to long-term financing. In Pakistan, the ratio of mortgage finance to GDP is less than 1 per cent, whereas in China it is 15 per cent, Malaysia 28 per cent and India 9 per cent, said Saleem Kassim Patel, Regional Chairman of ABAD, Sindh & Balochistan. http://e.thenews.com.pk/11-20-2009/page18.asp#; |
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