BHBFC to expand housing finance to dist, UZ levels

The state owned Bangladesh House Building Finance Corporation (BHBFC) is set to expand its housing finance activities to district and upazila levels of the country, sources said.

To this effect, the BHBFC recently sought Tk 5.0 billion as capital assistance from the government, the sources added.

The lone state-owned financing body for housing sector applied October 3 to the bank and financial institutions division of the Ministry of Finance to lend Tk 5 billion urgently for expansion its loan activities in the rural areas.

Earlier, the BHBFC sought capital assistance from the government for stepping outside the capital to expand its credit window to rural areas, concerned sources informed.

The target for loan sanction and disbursement during the current fiscal year (FY) 2013-14 has been set at Tk 5 billon and Tk 4.20 billion, according the BHBFC data.

From July to October of the current FY, BHBFC sanctioned loans to the tune of Tk 1.70 billion to its clients. Besides, about Tk 1.50 billion of last FY is awaiting disbursement.

"The living standard of the people of the rural areas is increasing gradually. As a result, demand for housing loan is growing in these areas which have attracted us to expand our footsteps to the areas," BHBFC Managing Director Dr Nurul Alam Talukder said in a letter to the government.

A high official of the BHBFC said the office wants to offer home loans to people in the rural areas with high economic activities to expand its lending activity beyond cities and towns, provided it gets capital assistance from the government.  

The BHBFC has long been suffering from fund shortage which it had already informed the finance secretary through the board of directors of the state owned entity on September 9. The then secretary had given assurance to help in this connection, sources said.

The BHBFC is not able to expand its activity in upzila and district level due to fund crisis, sources said.

"Demand for providing housing loan is there in Kishoreganj, Gopalganj, Sirajganj and Srimangal after BHBFC opened its branch offices in these areas. We need Tk 1.0 billion for disbursing loan in the areas within December. There is possibility of adverse impact among the people of the areas, if we are unable to disburse loans," said the letter which was sent to the finance ministry recently.

The Ministry of Finance sources said that in the fiscal year 2012-13, the BHBFC got only Tk 400 million as loan from the government. It could not mobilise any other fund for its lending purposes.

The BHBFC provides house building loans in Dhaka and Chittagong metropolitan cities at a lending rate of 12 per cent, while it is 10 per cent for other cities and towns.

There are plans by BHBFC to expand its activity through setting up an office in every district gradually.  Now the organisation is operating 29 offices across the country.