World Bank approves $145 million to help improve poor’s access to affordable housing in Pakistan

WASHINGTON, March 30 (APP): The World Bank has approved $145 million for Pakistan to help improves processes that would enable poor, including women, to have access to affordable houses through mortgage financing.
The funds to be made available under the Pakistan Housing Finance Project (PHFP) will support the government’s efforts and vision for the development of the housing sector in Pakistan and is geared towards helping women and low-income group get home ownership.
“This project will spur the development of housing mortgage market in the country and make housing finance affordable and reachable to many Pakistanis,” said Illango Patchamuthu, World Bank Country Di-rector for Pakistan. “The beneficiaries will include women and low-income groups through improved incentives for ecofriendly homes.”
The project will extend financial and technical assistance to Pakistan Mortgage Refinancing Company (PMRC), the Planning Commission (PC), and other institutions to increase availability of mortgage financing for households, according to a statement issued in Washington.
According to the estimates, nearly a third of the country’s nearly 200 million population do not own homes and there has been rising demand.
“Pakistan’s mortgage finance to Gross Domestic Product ratio of 0.25 percent is extremely low compared to the South Asia average of 3.4 percent,” said Korotoumou Ouattara, World Bank Senior Financial Sector Economist.
He said that there was a significant market gap across all segments of the population and the creation of PMRC marks an important step in achieving the Government of Pakistan’s objective to improve access to housing finance in the country.
“The project will address the liquidity constraints of lenders, support capital market development, and create an enabling environment for a sound national housing policy.”
According to the World Bank, the project adopts an innovative approach including crowding in commercial financing for home ownership and providing greater incentives for women to become home owners.
It also incentives people to build energy efficient and green homes and adopt climate and disaster-resilient construction designs and materials.
The project is being financed by the International Development Association, the World Bank’s fund for the poor, with a maturity of 25 years, including a grace period of 5 years.
Pakistan has received $42.7 billion in assistance, which include $33.4 billion in loan and credits and $9.3 billion in grants, since it became the member of the world body in 1950.
The World Bank’s pro-gram in Pakistan is governed by its Country Partnership Strategy (CPS) for FY2015-2020 with four priority areas of engagement: energy, private sector development, inclusion, and service delivery.
Pakistan receives financing support from the International Bank for Reconstruction and Development (IBRD) and concessional financing from the International Development Association (IDA).
The current World Bank portfolio includes 40 projects with a net commitment of $6.8 billion.