PESHAWAR, Sep 16: The federal government's endeavours to improve recovery of dues from the borrowers of the House Building Finance Corporation (HBFC) received a setback in NWFP because of negligible response meted out to the corporation's relief package announced early this year, Dawn has learnt.

Figures collected from HBFC's offices in different districts of the province revealed that the incentives attracted little response from the defaulters and borrowers. "The response to the relief package is not very encouraging," an official of a corporation admitted.

However, the corporation is likely to make little gain in terms of recovering part of the funds. The corporation has more than 2,000 defaulters who have not paid dues even after the maturity of their cases (within the maximum timeframe in which they were supposed to clear the loan amount).

The relief package contained incentives for the defaulters and borrowers, giving them waver on account of interest payment. The defaulters were asked to repay their outstanding dues in 36 monthly instalments with no mark-up over and above the amount (principle and interest) payable by June 30, 2004.

Similarly, the borrowers (whose cases have not yet attained maturity and they are making regular payments against their loans) were asked to pay their respective remaining outstanding amount in 36 monthly instalments against a fixed interest rate of 10 per cent - instead of interest rate (ranging between 10 and 17 per cent) being charged under their respective agreements with the corporation.

"The incentive package did not receive the response it deserved in view of the interest waver," said an HBFC official. The corporation offered incentives to about 6,000 borrowers across the province.

Some 2,000 of them were those who have not been able to clear their loans even after the expiry of the maximum limit in which they were required to pay dues and get their houses freed from mortgages.

Data collected from different centres reflected that out of about 6,000 borrowers, nearly 1,500 have so far volunteered. Of them about 300 are those who were on the defaulters' list. The corporation has accepted requests by several clients who have opted to benefit from the relief package.

The poor response has been attributed to many reasons, including lack of understanding about the package and difficulties experienced in terms of providing post-dated cheques to the HBFC on the part of those who volunteered to apply under the relief package.

Similarly, commercial banks' reluctance to issue 50 and 100-leaf cheque books to HBFC's clients was also responsible for the poor response. "In some cases, the banks refused to issue cheque books with more than 25 leafs to HBFC's borrowers, resultantly our campaign experienced hiccups in its early stages," said another official.

However, after being moved through proper channels the commercial banks have started issuing bigger cheque books, helping the corporation's scheme a kick-start. "In few of the cases, post-dated cheques for a period of 36 months have also been deposited with the corporation and the matter of cheque books now stand resolved," said the official.