The government is going to provide Tk 1.0 billion fund assistance to Bangladesh House Building Finance Corporation (BHBFC) of which Tk 500 million will be disbursed in the current fiscal year (FY) and the rest in the next FY, officials said.
A high official of the Ministry of Finance (MoF) said: "The initiative is taken mainly to offer housing facility to the government service holders with lower salary and also meet the housing demand in the country's rural areas."
 "We are considering giving the fund to the BHBFC in two instalments -- Tk 500 million in FY 2014-15 and Tk 500 million in FY 2015-16," he said.
 "The division concerned of the MoF is working on the BHBFC fund issue," Deputy Secretary of Bank & Financial Inst Division of the MoF Syeda Nurun Nahar told the FE Sunday.
Some Tk 500 million may be offered to the state housing corporation in FY 2014-15 from the Tk 50 billion fund set aside in the current fiscal year's budget to meet the state-owned banks' capital deficit, he added.
The criteria for getting the fund are: The loan must be used as housing loan under BHBFC. Rate of interest of the loan will be 3 per cent annually. The loan will have to be repaid to government within 20 years in 40 instalments including total fund and interests, according to the MoF.
Earlier, the capital-starved BHBFC had sought a Tk 5.0 billion fund from the MoF for continuation of its housing loan programme.
"We need adequate funds to extend house building financing at district and sub-district levels to follow the directives of President Abdul Hamid and Prime Minister Sheikh Hasina. Presently, BHBFC's annual demand for loan is about Tk 10 billion. But the corporation could not invest in line with people's expectations because of fund shortage," a high official of the BHBFC said.
The BHBFC is expanding its activities to upazila and district levels. Demand for providing housing loan is there in Kishoreganj, Gopalganj, Sirajganj and Srimangal after BHBFC opened its branch offices in these cities, according to the BHBFC.
 "The living standard of the people of the rural areas, especially at district and sub-district levels, is increasing gradually. As a result, demand for housing loans is growing in these areas which have attracted us to expand our footsteps to the areas," BHBFC sources said.
Another high official said BHBFC 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 MoF sources said in the fiscal years 2009-10, 2010-11, 2011-12, 2012-13 and 2013-14 the BHBFC received some Tk 1.50 billion, Tk 575 million, Tk 250 million, Tk 400 million and Tk 500 million as loans from the government respectively.
The BHBFC provides house building loans in Dhaka and Chittagong metropolitan cities at a lending rate of 12 per cent, while the rate is 10 per cent for other cities and towns.
The BHBFC has set a target to disburse loan worth Tk 4.50 billion for the FY 2014-15. Presently, the authorised and paid-up capital of the corporation is Tk 1.10 billion.
There are plans by BHBFC to expand its activities through setting up an office in every district gradually. Now the organisation is operating over 29 offices across the country, BHBFC sources said.
rezamumu@gmail.com