KARACHI, Sept 12: The House Building Finance Corporation has exceeded Rs1 billion mark of disbursement under its “Ghar Asan Scheme” in August 2003.

According to a press release issued by the HBFC here on Friday, HBFC managing director Sohail Osman Ali said: “This is an important milestone as it is the first time in the history of the country that Rs1 billion mark of disbursement has been touched for a housing finance product based on the Islamic mode of finance.”

He said the scheme was launched as a pilot project from Karachi, Lahore, and Islamabad in March 2002, and by June 2002 it was available throughout the country. The HBFC resumed its lending activity which had been suspended for the past 20 months since July 2000, following the decision of the Supreme Court in the famous “Riba” judgment. “The Ghar Asan Scheme was based on a Diminishing Musharika”, he added.

Referring to some of the salient features of the scheme, he said the maximum limit of loan was now Rs5 million with a debt equity ratio of 60:40 as prescribed by the regulators with a repayment period of up to 25 years, subject to eligibility.

He said the facility was available for construction or purchase of a house or a flat. For the construction facility, in order to help borrowers, the HBFC did not charge anything for the first nine months, he added.

Mr Ali said that in April 2003, a Modarabah facility was launched called “Shandar Ghar” for home repair and renovation. With the launch of this product, the HBFC had become a multi-product company. He expressed the hope that a third product with the concept of Ijara or leasing/ Ijara wa-iqtina (hire/purchase) was likely to be launched soon.