Widowed borrowers: HBFC urges MoF to allocate Rs 800 million for loan waivers

The ministry of finance has been requested to allocate Rs 800 million for a scheme designed to write off all the outstanding loans of the widowed borrowers, according to sources in the ministry. Sources said House Building Finance Corporation has taken up the matter with the finance ministry through a letter for allocation of Rs 800 million and the response is yet to be received for providing relief to the widow borrowers.
The loans waiver from the HBFC is contingent to the provision of funds from the finance ministry, they added. The HBFC lending has been on decline primarily because no fresh financial inflows from any source other than conversion of loans by the State Bank of Pakistan in the equity. The Corporation disbursed Rs 1.5 billion in 2013 to 1,640 applicants, followed Rs 2.2 billion in 2014 to 2,311 clients and Rs 3.6 billion in 2015 to 1,860 cases. The disbursement during January-October 2016 was reportedly at Rs 2.7 billion to 1,677 cases.
Sources said the Senate Standing Committee on Finance wanted the HBFC to write off the old pending loans of widows and a case was put up to its board of directors for approval. The managing director was authorised to approach the finance ministry for providing funds of Rs 800 million for giving relief to the widow borrowers. An official said though the verification of data with respect to total loans are in the process, it is expected that the amount may be within the range that has been requested. They added that the proposal is to write off the loans of 5,000 widows.
As per the criteria adopted by the HBFC during last three years, in purchase cases, the payment of instalments starts immediately from the following month. Similarly, for Balance Transfer Facility (BTF) cases, the payment of instalments starts from the 1st month following the data of execution of Islamic House Finance Agreement.
Sources maintained that for construction of a residential property, monthly repayment of utilisation cost (rent) starts immediately after the disbursement of first tranche and will be charged on daily product basis. The rent component will increase in size after the disbursement of each subsequent tranche, commensurate with the HBFCL share in the property.