BB housing refinance fund running out
Saturday, 1 August 2009
The Bangladesh Bank Housing Refinance Scheme (BBHRS) faces uncertainty as its Tk 5.0 billion fund is going to be exhausted soon, dashing the dreams of many a low-income group people to have small homes of their own in capital Dhaka, reports UNB.
Sources said the Bangladesh Bank (BB) had so far provided Tk 3.5 billion at 5.0 per cent interest to financial and banking institutions (FBIs) out of the total amount of Tk 5.0 billion allocated by the government for the BBHRS.
The total amount may be exhausted within the next three months as the financial and banking institutions are taking about Tk 450 million to Tk 500 million every month to disburse loans to the buyers of flats and houses, who have a monthly income of up to Tk 50,000.
Under the refinancing scheme, borrowers are entitled to receive loan up to Tk 2.0 million at 9.0 per cent interest for a period of 20 years.
"The housing sector will face a setback in its efforts to create home ownership for the middle- and low-income groups in the capital and on its outskirts if the BBHRS does not continue," said a BB official preferring not to be named.
He said the BBHRS had received a tremendous response from the middle class to have small but affordable homes of their own. "The BBHRS not only supports economic growth of the country but also strengthens the society by enabling families to have a physical stake in it."
A retired government secretary said Bangladesh Bank should continue the programme with an even bigger fund of at least Tk 10 billion as it had multiplier effects on the economy through backward and forward linkage industries to the real estate sector like cement, iron and steel, bricks, electrical equipment, tiles, fittings, ceramic manufacturing industries, etc.
Against the backdrop of increasing demand for housing loan, the BB launched the Tk 3.0-billion refinancing scheme for housing loan in fiscal 2007-2008. Later, the fund was increased to Tk 5.0 billion.
Sources said the Bangladesh Bank (BB) had so far provided Tk 3.5 billion at 5.0 per cent interest to financial and banking institutions (FBIs) out of the total amount of Tk 5.0 billion allocated by the government for the BBHRS.
The total amount may be exhausted within the next three months as the financial and banking institutions are taking about Tk 450 million to Tk 500 million every month to disburse loans to the buyers of flats and houses, who have a monthly income of up to Tk 50,000.
Under the refinancing scheme, borrowers are entitled to receive loan up to Tk 2.0 million at 9.0 per cent interest for a period of 20 years.
"The housing sector will face a setback in its efforts to create home ownership for the middle- and low-income groups in the capital and on its outskirts if the BBHRS does not continue," said a BB official preferring not to be named.
He said the BBHRS had received a tremendous response from the middle class to have small but affordable homes of their own. "The BBHRS not only supports economic growth of the country but also strengthens the society by enabling families to have a physical stake in it."
A retired government secretary said Bangladesh Bank should continue the programme with an even bigger fund of at least Tk 10 billion as it had multiplier effects on the economy through backward and forward linkage industries to the real estate sector like cement, iron and steel, bricks, electrical equipment, tiles, fittings, ceramic manufacturing industries, etc.
Against the backdrop of increasing demand for housing loan, the BB launched the Tk 3.0-billion refinancing scheme for housing loan in fiscal 2007-2008. Later, the fund was increased to Tk 5.0 billion.