THE property survey ordered by the prime minister to identify plots eligible for mortgage under the Apna Ghar Scheme addresses only a small part of the housing finance problem. Banks have approved 53,127 — worth Rs313.42bn — of the 147,504 applications received. But they have disbursed only Rs45.43bn to 8,739 borrowers. Barely 16pc of the approved borrowers have received the money, and disbursements amount to around 14pc of the approved value. The gap between approval and disbursement deserves greater official scrutiny. The survey may widen the pool of eligible collateral, but it cannot by itself persuade banks to assume more credit risk at the expense of the shareholders. Commercial banks, apart from state-owned banks, remain wary of lending against property, because recovering loans after default is a laborious process.

This legal weakness is why housing loans make up less than 1pc of total bank lending in Pakistan, far below that in comparable economies, where quicker recovery allows banks to channel a much larger share of credit into mortgages. Mortgage enforcement reform should be central to the government’s housing strategy. Foreclosure and recovery procedures need to be faster and predictable, while protecting borrowers from arbitrary treatment. Banks will expand housing credit once they are convinced that a mortgage remains a recoverable asset after default. The government should also publish regular data on mortgage loan rejections and undisbursed approvals, explaining what blocks borrowers from receiving funds. Bringing major developers into the scheme cannot substitute for enforcement reforms that make mortgage lending commercially viable. Nor should public-sector banks be left to handle the scheme alone. It may expand disbursements temporarily, but with private banks staying uninvolved it would not build a market that survives. The real test of Apna Ghar is the lasting mortgage credit it generates across the banking industry. Pakistan needs bank lending against property as routine business, not under pressure from the government.

Published in Dawn, September 11th, 2026