KARACHI, July 15: The House Building Finance Corporation (HBFC) as a major policy shift would now focus on lower and middle income groups, which constitute 95 per cent of the total housing clientele. The corporation will also enter into retail and wholesale housing projects to meet annual demand of 1.2 million housing units.

This would mean that the HBFC would now concentrate on such income groups having monthly income between Rs3500 to 5000 and could afford to pay back the instalments and also meet their monthly expenditure of basic necessities.

Presently 24 scheduled banks are also extending housing finance and their targeted clients are mostly of high income groups having name lending because of posh localities or known people in their respective fields such as businessmen or professionals.

These banks have approached the government to enhance the housing finance limit from Rs10 million as the rising cost of living have pushed prices of construction material sky high. However, the question is that how many people in this country could afford to pay back a monthly instalment which may come around Rs100,000 to Rs150,000 per month for a period of 15 to 20 years.

However, HBFC has to cater to the needs of such people who have meagre means and striving hard to have at least a shelter of their own in their life time. These people are those who have no name lending or a label to support their social status so that they could pay back loans.

Zaigham Mahmood Rizvi, chairman and chief executive of HBFC told Dawn that the organization is presently undergoing major reforms programme. He said after taking over the charge early this year his first and the foremost task was to look into the viability as well as purpose of the HBFC.

He said, after analyzing the entire situation, he concluded that the HBFC had a place and a reason to operate even if there were as many as 24 commercial banks in the housing finance business. The simple reason, Mr Rizvi said, was that these banks were not catering to the needs of SMH (small and medium housing) finance and their targeted clients were of high profile areas and people only.

Consequently, the HBFC immediately changed its slogan “The Housing Bank for SMH Financing” and also adopted a new strategy for ensuring the success of its policy. Under the new vision, he said the HBFC would work as socially responsible and commercially sustainable housing finance institution. It would meet the housing finance of low income and middle income groups of populations.

Above all, he said, the HBFC, unlike commercial banks, did not carry any negative lists of areas or people but would extend housing loans on merits and after meeting legal requirements.

“I would like to concentrate on 85 per cent of clientele who mostly seek housing loans below Rs100,000 and have monthly income between Rs3500 to Rs5000 and could only afford to pay an instalment of Rs1000 to Rs1200 per month in 15 to 20 years,” Zaigham Mahmood Rizvi asserted.

He further said that HBFC under its SMH finance have targeted three categories of clients: first, those who could afford to get loan of Rs0.5 million, followed by those who were interested in getting loan between Rs0.5 million to Rs1.5 million and those between Rs1.5 to Rs2.5 million.

All these categories, he said belonged to low income and middle income groups of populations.

Assisted by Mujahid Zameer executive director HBFC, Mr Rizvi was candid about a public sector organization and said: “Coming from a private sector it was difficult for me to sit on wrong-doings and on a system having a number of flaws.”

He also gave details of the ongoing reforms programme being undertaken by the present management in improving the working of the HBFC internally and externally. The measures taken to automate and computerize the entire working and also opening of new branches to reach out small towns and villages that had been neglected by the HBFC.

Briefing about a few steps being taken to bring about a cultural change and induce efficiency in the HBFC, he said that up-gradation of branches and offices were under way and customer-friendly and market-oriented working environments being introduced.

There is disaster recovery programme and safe keeping of precious documents which includes digital archiving and also enhancement of human asset value.

Above all, Zaigham Mahmood Rizvi said that comprehensive software for loaning, recovery and reconciliation of customers’ accounts within the HBFC would be installed to minimize manual office work and direct contact between staff and borrowers to reduce the chances of corruption and malpractices.