ISLAMABAD, Aug 22: A World Bank delegation currently visiting Pakistan, on Thursday called on Finance Minister Shaukat Aziz and discussed various policy options for the development of a viable housing finance system in the country.

The minister stated the housing sector is engine of growth and creates jobs and supports several industries.

The World Bank Mission while identifying causes of inadequate supply of funds in the housing sector emphasized the inherent mismatch between the short-term deposits of commercial banks and the long-term requirement of funds in the housing sector; the unreliable property titling and registration system and ineffective enforcement of mortgage rights as the principal factors.

The role of House Building Finance Corporation (HBFC) which suffered from problems of poor governance and non-performing loans has been only nominal in comparison to the demand.

Shaukat observed that things won’t change unless they are done differently. There was need of more institutions in housing finance sector. For the provision of affordable housing, the government, besides fiscal incentives, has been consistently bringing down the cost of funds for financial institutions along with measures to evolve a market for housing mortgages and their securitization, Shaukat said.

He appreciated the efforts of the Securities and Exchange Commission of Pakistan (SECP) in this respect which had recently issued rules for securitization. He observed that establishment of a mortgage Refinance Corporation would help by providing vital liquidity to the primary market and attracting funds from the capital market for the housing sector.

He expressed the hope that World Bank would be able to provide the requisite concessional funds for this purpose.

The Mission appreciated the efforts of the government particularly the reforms for the growth of the capital market and the improvements brought about in the recovery laws along with budgetary and tax incentives for the housing sector industry.

—APP