- Banks also advised to put on hold fresh disbursement under Prime Minister's Kamyab Jawan Youth Entrepreneurship Scheme
The government has suspended the popular 'Mera Pakistan Mera Ghar' (MPMG) Scheme, advising banks, Development Financial Institutions (DFIs), and microfinance banks (MFBs) to put further disbursements on hold from July 1, 2022 till August 31, 2022.
In a circular issued on Thursday, the State Bank of Pakistan (SBP) said that the government of Pakistan is considering to review/revise features of the subject scheme in light of recent developments in macroeconomic scenario.
"Accordingly, banks/DFIs/MFBs are advised to put further disbursements under MPMG on hold from July 01, 2022 till August 31, 2022.
"However, in those cases where partial disbursements have already been made till June 30, 2022, banks/DFIs/MFBs may release remaining disbursement under MPMG," the circular added.
Meanwhile, in another circular on Thursday, the SBP also announced suspension of the Prime Minister's Kamyab Jawan Youth Entrepreneurship Scheme (PMKJ-YES) scheme for 15 days.
"It is advised that the government of Pakistan is considering to review/revise features of subject Scheme in light of recent developments in macroeconomic scenario. Accordingly, banks participating as executing agencies under PMKJ-YES are advised to put on hold fresh disbursement from July 1, 2022 to July 15, 2022."
The two schemes were rolled out by the Pakistan Tehreek-e-Insaf (PTI) government, and aimed at providing affordable housing as well as entrepreneurship loans.
Since its launch in 2020, applications worth Rs473.7 billion have been submitted under the MPMG scheme. Banks have so far approved an amount of Rs212.3 billion, and disbursed only Rs85.2 billion, according to latest available data with the SBP.
The scheme provides low-cost housing loans up to Rs10 million with mark-up ranging between 3% and 9% for the first ten years before switching to market rates after 10 years.
The move comes as Pakistan faces budgetary constraints, which has triggered a series of measures including the imposition of a supertax, higher income tax rates for the salaried group, and removal of subsidies on energy.