Islamabad: Development Finance Group (DFG) Executive Director Mr Samar Hasnain has said that the government will soon relaunch Mera Pakistan Mera Ghar Scheme with revised financial features, news sources reported. The formal disbursement under the newly developed scheme will start on August 31.
Read: Govt to relaunch MPMG housing finance scheme in a week
Dr Hasnain revealed on a podcast that the government is working on a strategy to make the scheme more practical and sustainable for the central bank to support. He stated that the new modifications would be made with the macroeconomic developments, which have changed rapidly in recent months. He also highlighted the following reasons for the policy change:
- When banks were receiving funds at the Karachi Interbank Offered Rate (KIBOR) + 4% market rate, the government offered a 7% mortgage subsidy. However, when the KIBOR reached new highs, the government was forced to grant a 12% discount to home buyers, which was costly for the government to maintain.
- The banks lacked adequate liquidity reserves for the 15 to 20-year strategy, resulting in a minimal release of funds for mortgaging.
- The International Monetary Fund (IMF) -backed loan tranches negotiations compelled the government to reconsider and reorganise the scheme’s financial basis to reduce the strain on the foreign reserves.
Read: PM approves PKR 100 bn for low-cost ‘Mera Pakistan Mera Ghar Project
Furthermore, Hassnain stated that the government recognises that the MPMG programme is linked to 40+ industries, implying that a boost in construction will result in a healthier economy. He also stated that the government will begin providing funds to applicants whose loans have been approved but not yet issued.