House Building Finance Corporation (HBFC) is the oldest housing finance institution in Pakistan, besides one amongst the oldest housing finance institutions in the Asia-Pacific region founded in 1952 by the Government of Pakistan with an exclusive aim for mitigating and alleviating the housing finance needs of the people of the country.
Initially the HBFC was providing loan facilities for the construction of houses but by the passage of time the horizon of its scope was also branched out into diverse dominions like Financing for purchase of house/flat, Renovation of House (Home improvement financing), loan transfer and Balance transfer fund.
Over the years HBFC's operation has flourished and it is now spread over all over Pakistan including Azad Jammu and Kashmir with a network of 3 Regional, 12 Zonal, 58 District, 4 Camp and 25 Representative Offices.
The uniqueness of HBFC is that it has no negative list. It investment facilities throughout Pakistan are available on all legalised residential locations.
HBFC is amongst one holding largest housing finance network. Today has its divisions in 80 cities and towns throughout Pakistan and is targeting to expand its undertaking to 150 cities and towns. Its Head Office is situated in Finance & Trade Centre Karachi.
HBFC's paid up capital is Rs 3.00 Billion (62.5% for Federal Government and 37.5% for State Bank of Pakistan). Total disbursement made by HBFC since its inception has been 39.203 Billion and it had so far provided housing finance to nearly half-million individuals and 28 corporate clients.
The general directive and administration of the Corporation and its affairs is entrusted to a Board of Directors and the Managing Director, who together with the assistance of Board Committee manages and controls the affairs of the Corporation.
HBFC's main aim is to provide Sharia compliant financing to its consumer market. HBFC's financing schemes have also evolved over its 53 years of establishment to acquiesce with this aspiration. These schemes have propelled HBFC towards the fulfilment of its Business Focus which is to accommodate the low and middle income group's housing needs. Thus HBFC offers a wide range of products for the ministration of its consumers.
HBFC is on its way to become a corporate organisation shortly, therefore, to meet the upcoming corporate challenges and to cater to the growing needs of the Corporation, HBFC has taken certain drastic steps. It is enhancing its operational efficiency through preparation and implementation of manuals, computerisation, human resource development and elimination of ineptness and corruption though internal controls and redesigned reward structure.
In the last two years, it has undergone radical changes. HBFC has now made its top priority to aggressively seek new business, especially from the small & medium segment, by massively designing "Shariah Complaint" asset and liability products to reach faith-based clientele as well.
HASSLE-FREE & DOORSTEP SERVICES ON ODD LOCATIONS:
The physical presence has been expanded through its Expansion of Out-Reach Program (EOP). Under this programme, HBFC trains "Service Representatives" who are selected after a thorough screening process and "franchises" HBFC client service business to them in selection urban & rural locations. These Service Representatives serve the clients in their assigned territories by operating "Representative Offices".
Once EOP has proven successful, HBFC intends to use it to cur its operational expenses by replacing some of its currently non-profitable branches (at least 25) by Representative Offices. EOP is not an un-tested model, as similar models have proved successful in next-door India where two of it main housing finance institutions, Housing Finance Development Corporation of India (HDFC) & Dewan Housing Finance Corporation Limited (DHFL) heavily relies on a similar program to reach large and wide-spread clientele.
ANOTHER FORM OF OUT-REACH:
Pakistan is country with more than 150 million Muslims, Islam is a way of life for most of them. There are a lot of people who would not avail themselves of service provided by conventional housing finance institutions as interest is prohibited in Islamic Shariah (Law). HBFC sees this as an opportunity, for its coming up with "Shariah Compliant" asset and liability products to tap this segment it has expanded its asset-side product range with the help of technical advice from premier Islamic Banks like Meezan Bank, HBFC has already floated a General Takaful (Insurance) Company, and will shortly be launching a Life Takaful Company. Liability products like REITS, MBS, Bonds (Sukuk) are being developed. HBFC has plans to launch Long-Term "Real-Estate Islamic Funds". Sukuk in the Middle-East and the Far-East. Thus HBFC is paving the path for a brilliant future by amplifying its presence.
(The writer is Managing Director House Building Finance Corporation.)