Conference on promotion of HFCs for housing finance held

For the promotion of housing finance companies as a source of developing housing sector in Pakistan, a conference for the members of NBFI and Modaraba Association of Pakistan was organized by Securities and Exchange Commission of Pakistan SECP), Pakistan Mortgage Refinance Company (PMRC) and NBFI and Modaraba Association of Pakistan in Karachi.

Muhammad Shoaib Ibrahim, Chairman, NBFI and Modaraba Association of Pakistan while thanking Farrukh H. Sabzwari, Commissioner, SECP and Mudassir H. Khan, CEO, PMRC said that housing is indeed a very important sector of the economy which has so far been catered for by HBFC and to some extent by commercial banks.

There is a visible gap between demand and availability of the mortgage financing which provides a significant opportunity to NBFI and Modarabas to cater to the needs of low and middle income groups. He further said that it is encouraging that PMRC is providing long term funding at a reasonable cost to both conventional and Islamic segments to accelerate the housing finance business, this will promote the mortgage market in the financial sector and by joining hands with PMRC, NBFI and Modaraba Sector will also get more opportunities to accelerate its housing finance business. It will also support implementation of the government's policy of encouraging housing ownership.

Farrukh Sabzwari highlighted the role and efforts of SECP in promoting housing finance companies. He also mentioned salient features of regulatory framework for Housing Finance Companies (HFCs) including licensing requirements. Farrukh Sabzwari encouraged Modaraba Companies to diversify their operations by entering into mortgage lending space by obtaining HFC license. He also appreciated efforts made by PMRC for development of Affordable Housing Finance particularly for low income group.

Mudassir H. Khan, MD/CEO of PMRC said that affordability and accessibility of a housing finance for the low and middle income groups are a major hindrance in the development of mortgage market in the country. He also said that primary mortgage lenders provide mortgage loans for specific areas and customer segments due to several reasons such as foreclosure laws, delays faced in recoveries and defective property titles. He mentioned that government was making efforts to address these concerns for the development of the housing finance market.

Muhammad Shahzad Khan, Head Business of PMRC briefed on the role of PMRC and how PMRC can play a vital role to not only facilitate government mission of promoting mortgage financing in Pakistan but also development of fixed rate bond/sukuk capital market. Muhammad Yunas Ali, Manager Islamic Business, of PMRC presented the Shariah structure of PMRC's Islamic Refinance Product. He informed that, besides Malaysia, PMRC is the only institution in the entire Middle East, South Asia and North Africa who has successfully launched Islamic Refinance products.