Additional fund for BHBFC
Tuesday, 23 March 2010
In the 1970s houses in the capital Dhaka were mostly made of CI sheets, wood and thatch, seldom were brick homes viewed other than office buildings. The Bangladesh House Building Finance Corporation (BHBFC) during that time was given a Tk one billion fund by the government from Saudi aid money to initiate a multi storied building loans programme for the public at a relatively low rate of interest (initially 5% per annum simple interest) for constructing residential houses in cities. With the government's multi loan facility from BHBFC, hundreds of residential houses were constructed by residents in different cities and towns within a decade. Without BHBFC it could not have been possible.
As time passed the demand for house building loans increased manifold. Population, construction materials and land price have gone up sky-high. Rents on flats have also become prohibitively high due to limited resident buildings.
A lot of potential plots could be developed if HBFC comes forward with soft, long term and low interest bearing loans targeting people who inherited a lot of land from their ancestors. The share land owners in most cases cannot afford to construct houses on their own. They need soft finance from BHBFC. The other financing institutions in the country charge very high interest with different tied conditions and medium repayment duration that are not feasible for most land owners. The so called realtors (developer) are taking advantage of their situation, constructing buildings on their plots, giving a portion only to the land owners and selling the other flats at very high price to members of the public. Owing to scarcity of land and limited soft loan availability a very small number of affluent people are buying those flats.
BHBFC can now finance only a small number of clients owing to limited funds, although it has manpower to handle more loans. Bangladesh Bank is helping Leasing companies and other private companies, but not the government-owned BHBFC, to disburse house building loans. Why?.
Government should provide enough funds to BHBFC to expand its easy house building loan facility so that housing, the third basic need of citizens, will be accessible to more people.
Mohammad Ashad Hossain
West Bashabo, Dhaka
mah120cb@yahoo.com
As time passed the demand for house building loans increased manifold. Population, construction materials and land price have gone up sky-high. Rents on flats have also become prohibitively high due to limited resident buildings.
A lot of potential plots could be developed if HBFC comes forward with soft, long term and low interest bearing loans targeting people who inherited a lot of land from their ancestors. The share land owners in most cases cannot afford to construct houses on their own. They need soft finance from BHBFC. The other financing institutions in the country charge very high interest with different tied conditions and medium repayment duration that are not feasible for most land owners. The so called realtors (developer) are taking advantage of their situation, constructing buildings on their plots, giving a portion only to the land owners and selling the other flats at very high price to members of the public. Owing to scarcity of land and limited soft loan availability a very small number of affluent people are buying those flats.
BHBFC can now finance only a small number of clients owing to limited funds, although it has manpower to handle more loans. Bangladesh Bank is helping Leasing companies and other private companies, but not the government-owned BHBFC, to disburse house building loans. Why?.
Government should provide enough funds to BHBFC to expand its easy house building loan facility so that housing, the third basic need of citizens, will be accessible to more people.
Mohammad Ashad Hossain
West Bashabo, Dhaka
mah120cb@yahoo.com