WASHINGTON, March 29, 2018 – The World Bank today approved $145 million to expand home owner-ship including women and the poor through access to affordable housing finance in Pakistan.
The Pakistan Housing Finance Project (PHFP) will support Government of Pakistan’s vision and strategy for housing development. 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. Nearly a third of country’s population does not own homes and this pressure is rising with growing demand.
“This project will spur the development of housing mortgage market in the country and make housing fi-nance 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 incen-tives for ecofriendly homes.”
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 incentivizes people to build energy efficient and green homes and adopt climate and disaster-resilient construction designs and materi-als.
“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. “There is a significant market gap across all segments of the population. 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.”
PHFP is 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.
The World Bank in Pakistan
Pakistan has been a member of the World Bank since 1950. Since then, the World Bank has provided $42.7billion in assistance ($33.4 billion in loans/credits and $9.3 billion in grants). 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 re-ceives financing support from the International Bank for Reconstruction and Development (IBRD) and con-cessional financing from the International Development Association (IDA). The current World Bank portfolio includes 40 projects with a net commitment of $6.8 billion.