Credit to housing sector witnesses 14pc growth
Wednesday, 31 December 2008
FE Report
Credit flow to the housing sector continued an upward trend in recent years as the investment there was treated as secured and profitable by the banks and financial institutions, officials said.
The housing loans rose by over 14 per cent to Tk 142.5 billion, which was 7.5 per cent of total credit to the private sector, in fiscal 2007-08 against Tk 124.6 billion of the previous fiscal, according to the central bank statistics.
"We expect that the investment in housing sector will further rise in the near future to meet the long cherished dream of owning a house by an individual," a senior official of the Bangladesh Bank (BB) told the FE.
He also said the banks and non-banking financial institutions (NBFIs) are giving priority to investment of fresh funds in the sector, which has been identified as profitable and secured.
"The central bank also provides re-financing facilities aiming to encourage the banks and NBFIs to disburse the housing loans among the people belonging to the middle and lower middle class," the BB official added.
On July 18, 2007, the central bank formed a Tk 3.0 billion fund initially for three years with a provision of replenishment with Tk 1.0 billion a year aiming to meet one of the basic needs of the people.
"In recent years, significant changes have been taking place in total housing loan portfolios," the central bank said in its annual report for fiscal 2007-08.
Of the total, the private commercial banks (PCBs) with ample deposit resources have been expending their housing loan portfolios, which dominated market position with the largest shares of Tk 50.8 billion in outstanding housing loans as of end June 2008, the annual report said.
The state-owned commercial banks (SCBs) had the second largest shares of Tk 33.6 billion and other banks Tk 16.6 billion in outstanding housing loans during the period.
"Besides, two private sector specialised housing finance providers are also slowly gaining ground. They provide fund for their operations with long term deposits including some contractual deposit schemes," it added.
The state-owned House Building Finance Corporation (HBFC) had the third largest share of Tk 24.4 billion in outstanding housing loans as on June 30 last.
The Grameen Bank provides housing loans to its members in rural areas. Some non-governmental organisations (NGOs) also have small involvement in lending to housing sector.
Grihayan Tahbil created by the government, provides housing loan to NGOs at the simple interest rate of 1.0 per cent, which in turn provides housing credit to the rural poor at the simple interest at 5.0 per cent.
In FY07 and FY 08, the Tahbil has recovered Tk 0.20 billion and Tk 0.15 billion respectively as against disbursed amount of Tk 0.12 billion and Tk 0.07 per cent through NGOs.
Since its beginning in FY98, the Tahbil has disbursed an amount of Tk 1.23 billion till June last.
Credit flow to the housing sector continued an upward trend in recent years as the investment there was treated as secured and profitable by the banks and financial institutions, officials said.
The housing loans rose by over 14 per cent to Tk 142.5 billion, which was 7.5 per cent of total credit to the private sector, in fiscal 2007-08 against Tk 124.6 billion of the previous fiscal, according to the central bank statistics.
"We expect that the investment in housing sector will further rise in the near future to meet the long cherished dream of owning a house by an individual," a senior official of the Bangladesh Bank (BB) told the FE.
He also said the banks and non-banking financial institutions (NBFIs) are giving priority to investment of fresh funds in the sector, which has been identified as profitable and secured.
"The central bank also provides re-financing facilities aiming to encourage the banks and NBFIs to disburse the housing loans among the people belonging to the middle and lower middle class," the BB official added.
On July 18, 2007, the central bank formed a Tk 3.0 billion fund initially for three years with a provision of replenishment with Tk 1.0 billion a year aiming to meet one of the basic needs of the people.
"In recent years, significant changes have been taking place in total housing loan portfolios," the central bank said in its annual report for fiscal 2007-08.
Of the total, the private commercial banks (PCBs) with ample deposit resources have been expending their housing loan portfolios, which dominated market position with the largest shares of Tk 50.8 billion in outstanding housing loans as of end June 2008, the annual report said.
The state-owned commercial banks (SCBs) had the second largest shares of Tk 33.6 billion and other banks Tk 16.6 billion in outstanding housing loans during the period.
"Besides, two private sector specialised housing finance providers are also slowly gaining ground. They provide fund for their operations with long term deposits including some contractual deposit schemes," it added.
The state-owned House Building Finance Corporation (HBFC) had the third largest share of Tk 24.4 billion in outstanding housing loans as on June 30 last.
The Grameen Bank provides housing loans to its members in rural areas. Some non-governmental organisations (NGOs) also have small involvement in lending to housing sector.
Grihayan Tahbil created by the government, provides housing loan to NGOs at the simple interest rate of 1.0 per cent, which in turn provides housing credit to the rural poor at the simple interest at 5.0 per cent.
In FY07 and FY 08, the Tahbil has recovered Tk 0.20 billion and Tk 0.15 billion respectively as against disbursed amount of Tk 0.12 billion and Tk 0.07 per cent through NGOs.
Since its beginning in FY98, the Tahbil has disbursed an amount of Tk 1.23 billion till June last.