The Bangladesh House Building Finance Corporation (BHBFC) is set to sign a Subsidiary Loan Agreement (SLA) with the government to provide house-building loan to middle and lower income people.
The country's middle and lower income people will get house-building loan from July this year under 'Rural and Peri-urban Housing Finance Project', a top BHBFC official told the FE on Wednesday.
Islamic Development Bank (IDB) will fund the project, he said.
A total of 1,046 multi-storied building will be built and a total of 47,856 rural and peri-urban people will be benefited under the project, according to the BHBFC.
The Bangladesh government signed an agreement with IDP group in this regard on April 3 in Tunisian capital Tunis at an annual meeting of the IDB.
Finance Minister AMA Muhit and IDB group President Dr Bandar Bin Mohammed bin Hamza Asaad Al Hajjar inked the deal on behalf of their respective sides.
Under the project, an individual loan recipient will get a maximum of Tk 8.0 million as house-building loan with simple interest rates while the ceiling for group home loan will be Tk 6.0 million.
Every recipient will get the loan against their piece of land measuring 560 to 670 square feet each.
The IDB will provide the fund for the project in three phases with the money for the first phase being given in July this year, said BHBFC Managing Director (MD) Debasish Chakrabarty.
The BHBFC has already sent a letter to the Ministry of Finance seeking its nod for disbursement of the first phase money, the BHBFC MD said.
He said the BHBFC is considering to sign a deal with Bangladesh University of Engineering and Technology (BUET) to determine the appropriate architecture and design to build modern houses in rural and peri-urban areas.
Besides, the BUET will also carry out soil tests and give advice and procedural guidelines for building modern houses on the allotted plots, he informed.
Talking to the FE another high official of the BHBFC said, one of the focuses of the project will be on protecting local agricultural land by vertically constructing the (high rise) buildings.
As the houses will be multi-storied so agricultural lands will be saved, according to the project.
The official said, once the project is implemented, a total of 185.64 hectares of agricultural land will be spared from being used in building houses.
Beside, the BHBFC will also provide architectures and construction guidelines for free to the loan recipients taking into account the soil conditions of their respective sites.
"A total of 94.75 million euro will be provided under the agreement to the government in three financial years," the official said.
According to the agreement with the IDB, the funds will be provided in the fiscal year 2018-19, 2019-20 and 2020-21.
The BHBFC will get the allocation in Bangladeshi currency as per the SLA with the government.
In the first phase the BHBFC will get 31.23 million euro, in 2nd phase it will get 38.25 million euro and 25.27 million in the final phase.
A total of 7,976 unit (flat) will be built under the project, 4,050 in rural, 28,025 in peri-urban and 1,101 for farmers and Bangladeshi labourers working in foreign countries.
The house building loans will be long-term (up to 25 years). People under the project can rent their house for paying installments and get profit through it, the HBFC official said.
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