Mera Pakistan Mera Ghar: Candidates doubt as SBP seeks ‘course of action’ with government Business & Finance
The State Bank of Pakistan (SBP) said “a line of action will be finalized in consultation with the government” for applicants who have deposited token amounts with sellers looking for houses under the scheme Mera Pakistan Mera Ghar (MPMG), now suspended. .
“The data for these customers is currently collected from the banks,” the SBP said in an email response to company registrar.
“The program has been temporarily suspended for two months as the government is revising its features to make it more conducive and practical in the wake of the current macro-financial environment.
“With respect to approved cases, customers who have already received partial amounts of their approved funding will continue to receive their remaining funding amounts in accordance with their agreements with their funding banks.”
Government suspends Mera Pakistan Mera Ghar program for two months
However, the biggest concern is the thousands of clients who have had their applications approved after months of documentation, but have yet to see the amount paid out to them. Several of these applicants are clients who have deposited token amounts with vendors after pursuing the scheme for months.
The issue arose after the government abruptly suspended the popular Mera Pakistan Mera Ghar (MPMG) scheme, advising banks, development finance institutions (DFIs) and microfinance banks (MFBs) to suspend additional disbursements from the July 1, 2022 to August. 31, 2022.
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Many applicants now fear losing their deposits after paying millions in documentation and partial payments.
“We have followed all the instructions set by our bank,” said a concerned customer. company registrar on condition of anonymity. “We paid the appraisal fee and after the bank approved the property, we then paid 10% of its value to the seller to confirm the transaction. Our sale agreement is now in jeopardy.
Another client, who says he spent 600,000 rupees on documentation and partial payment, is now due to vacate his current premises by the end of this month after ending his rental contract in hopes of moving to the new house .
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“I have no idea what’s going to happen.”
Under the scheme, banks had disbursed nearly 100 billion rupees by the end of June, according to SBP data. The central bank said disbursements had been made to around 28,000 beneficiaries. This means that the average loan amount to each beneficiary is Rs 3.57 million.
However, the amount approved by the banks stands at nearly 236 billion rupees, indicating the number of people who have yet to see any amount.
An official with knowledge of the matter said there were nearly 1,000 applicants with his bank alone awaiting disbursement.
There are 21 participating banks, but the number of applicants awaiting disbursement after making the deposit can vary significantly from bank to bank.
However, estimates made by company registrar suggest that more than 30,000 applicants have yet to see the full amount paid to them.
“The State Bank was pushing us vigorously to promote the program, then the government abruptly suspended it,” said a banker familiar with the matter. “Now people are stuck visiting banks regularly.”
The housing program, initially funded by the World Bank through the Pakistan Mortgage Refinance Company (PMRC), started in October 2020 with approvals starting in December of the same year.
The government then liberalized the features of the MPMG scheme in light of stakeholder feedback for the benefit of wider strata in March 2021, according to information available on the SBP website.
Available in both conventional and Islamic mode, this program aimed to enable banks to provide financing for the construction and purchase of homes at low rates for low to middle income segments of the population.
Pakistan’s mortgage-to-GDP ratio is just 0.3%, the lowest in the region, where the average for South Asian countries is 3.4%.
The SBP was the implementing partner along with the government and the Naya Pakistan Housing and Development Authority (NAPHDA).
However, with the backing of the World Bank, many questioned whether his suspension was necessary.
When questioned, the SBP said the World Bank was providing funding to the PMRC to complement its existing risk-sharing facility for banks.
“As banks have never ventured into social housing, this infrastructure support has been very useful. As mentioned earlier, the scheme has been temporarily suspended following the recent macro-financial environment. The government is reconsidering the features of the program to make it more targeted and conducive,” the SBP repeated in its response.