"One of the main points of Prime Minister Imran Khan’s election campaign was to revive economy through the construction sector, and the Naya Pakistan Housing Programme was his party’s flagship scheme for an economic turnaround"
But nearly two years on, the economic graph has spiraled down and except for some superficial progress, the Naya Pakistan Housing Programme has yet to gain momentum.
Despite several incentives, including subsidies, announced by the government for the scheme, experts believe that unless the mortgage industry develops with the help of the banking sector, the success of the PTI’s flagship scheme will remain elusive.
The PTI had set an ambitious target of constructing five million low-cost houses across the country under the scheme. After two years and with the government’s current track record, the target seems impossible to achieve.
In a meeting called by State Bank Governor Dr Reza Baqir, banks, Naya Pakistan Housing and Development Authority (NAPHDA) and the SBP decided to work together to prepare an overall roadmap and execution plans with support from sub-committees of the Pakistan Banks Association.
The meeting decided to identify a way forward to ensure sustainable market-led financing of housing projects and mortgages. The meeting was attended by NAPHDA Chairman Lt General Anwar Ali Haider and members of the thinktank formed by the government, including Shaukat Tareen, Arif Habib and Aqeel Karim Dhedhi, among others.
Baqir said that housing finance has not only remained under-developed in Pakistan compared to other emerging economies. “This initiative is of great national interest,” he said.
Meanwhile, Baqir emphasized that the construction and housing sectors have strong links to the rest of the economic sectors and offer a commercially viable long-term business proposition for banks.
The NAPHDA chairman made a presentation on the key features of the scheme. Tareen presented a financial model and elaborated the incentives being offered by the government and emphasized that these will make the financing of developers and mortgages commercially attractive for banks.The banks apparently expressed their readiness to participate in this initiative.
If Baqir is able to convince banks to enter the scheme wholeheartedly then the government may find a breakthrough to properly kick-off the programme. Otherwise, the much-hyped scheme will also become a part of several of the government’s empty promises, much like its predecessors.
