KARACHI, Feb 21: The Housing Building Finance Corporation (HBFC) has raised its capital to Rs3 billion by capitalization of its reserves. Disclosing this here, HBFC Chairman Zaigham Mahmood Rizvi said that it had also been decided that the corporation in the years to come would gradually raise its capital to Rs6 billion to meet the State Bank requirement.

He said that this condition had to be met by the HBFC after it had been notified as a development financial institution (DFI) under section 3-A of the Banking Companies Ordinance, 1962.

Mr Rizvi said that the HBFC under its new vision and mission aimed to be socially responsible and commercially sustainable housing finance institution of the country.

“Its business focus would be to provide small and medium housing finance to low and middle income groups and it also plans to enhance its mortgage finance business to Rs4 billion during the current year,” he maintained.

The HBFC chief said that the corporation would also gradually increase its business level to Rs20 to Rs25 billion by promoting “retail housing finance” and also encouraging bulk housing projects for “wholesale” housing finance.

“Measures are being taken to diversify the product range to cater to the needs of customers. The ongoing multi-dimensional reforms agenda is aimed at enhancing corporation’s market share by 20 to 25 per cent,” he added.

He said that at present the country was having annual mortgage finance of less than 0.5 per cent of its GDP, whereas in countries like Malaysia it stood at around 18 per cent.

Looking at the present growth rate in housing finance, particularly with the entry of 25 commercial banks in the market, it is expected that the country would soon be able to enhance its mortgage finance business to an appreciable level of Rs130 to Rs140 billion, which will enable it to record 2.5 per cent of its GDP, Mr Rizvi concluded.