The Wold Bank approved a US$ 435 million loan for the Pakistan government’s initiative to expand access to housing finance, particularly for low-income households under the Imran Khan government’s twin programmes of Mera Pakistan, Mera Ghar and Naya Pakistan.
The World Bank on Friday approved a US$ 435 million for three projects in Pakistan, the Pakistan Housing Finance project, the Punjab Urban Land Systems Enhancement project and the Punjab Affordable Housing Program.
The projects are designed to expand access to housing finance, particularly for low-income households, improve land tenure rights and facilitate affordable housing developments in the state of Punjab.
“Affordable and accessible housing is in high-demand in Pakistan, which is home to over 200 million people and is the most urbanized country in South Asia,” said Najy Benhassine, World Bank Country Director for Pakistan.
“These projects will contribute to addressing housing needs, particularly for low-income households, by leveraging the private sector and by facilitating access to mortgage options for those who currently cannot access financing to buy a home. They will also strengthen property rights and increase the supply of climate-resilient, affordable housing developments.”
The US$ 85 million financing will help expand access to affordable mortgages to increase homeownership among low-income households under the Pakistan Housing Finance Project. It will also scale up the credit risk-sharing facility launched in 2018, to provide partial credit guarantees to banks, in order to incentivise them to lend to borrowers traditionally excluded from commercial financing.
The project is expected to benefit up to 70,000 first-time homebuyers under the Mera Pakistan, Mera Ghar (My Pakistan, My Home), a government-aided housing interest rate subsidy program.
A part of this loan, the Punjab Urban Land Systems Enhancement Project is meant to strengthen land administration and facilitate housing authorities’ efforts to identify suitable areas and public lands for affordable housing developments in the Punjab province. The project, to the tune of US$ 150 million, will support the provincial government upgrade its land registry by creating a digital, province-wide inventory of lands and deeds for investments from the country’s private housing and construction sector.
Another component, the Punjab Affordable Housing Program, will increase the availability of affordable housing for low-income households in the province through better targeted subsidies under the government’s scheme for low-income households, the Naya Pakistan Housing Programme.
This component of the loan will benefit approximately 77,000 households over the next five years, half of which will be low income families living in urban areas.