Islamabad: The Economic Coordination Committee (ECC) of the Federal Cabinet has approved the launch of USD 85 million World Bank (WB)-funded Credit Guarantee Trust Fund through the Second Supplemental Trust Deed for low-income housing scheme – Mera Pakistan Mera Ghar, according to news published on November 30.
As per the details, the loan scheme was approved in a meeting held under the chairmanship of Finance Minister Ishaq Dar. During the meeting, the new scheme was approved at the request of the Finance Division to provide risk cover to Financing Institutions (FIs) for their financing in the housing sector.
The news source mentioned that the Pakistan Mortgage Refinance Company Limited (PMRC) has been established as a joint initiative of the Pakistani government and Commercial Banks/ Development Finance Institutions (DFIs). The company will offer medium to long-term funding to primary mortgage lenders by raising from the capital debt market at cheaper rates.
Under the new scheme, the PMRC as a trustee will get 0.25 on premiums received from FIs against their portfolio covered as trustees. The government will provide a backdrop arrangement of PKR 7 billion with the commitment to increase it up to PKR 30 billion, depending on the recommendations of the Oversight Committee.
It is important to note that the Oversight Committee will be formed to monitor the operations of the Credit Guarantee Trust Fund. The committee will ensure it meets the development objective and that the government’s contingent liability is within the agreed limit.