Karachi, December 17, 2007—IFC, a member
of the World Bank Group, and its partners, the State Bank of Pakistan and
the Canada Mortgage Housing Corporation, have provided housing finance
training to 120 Pakistani bankers. The goal is to improve local expertise
in the housing finance sector, helping build the capacity of 30 financial
institutions and address the increasing demand for affordable mortgage
loans for low- and middle-income people.
The training program was developed in response to a recent needs-assessment
study. It comprised two sessions. The first was tailored to senior management
and future master trainers. The second targeted mid-level employees, who
were trained on core lending issues related to residential mortgage lending.
Dr. Shamshad Akhtar, Governor of the State Bank of Pakistan, who chaired
the closing session on the bank’s role in promoting housing finance, said,
”Thanks to IFC and the international trainers, we are able to provide
lenders with training, best practices in housing finance, and training
material that is tailored to the Pakistani market.”
Syed Farhan Fasihuddin, IFC Program Manager
for housing finance in the Middle East and North Africa, said, “Although
outstanding mortgage loans in Pakistan grew from 24 billion rupees [$400
million] in December 2003 to over 78 billion rupees [$1.3 billion] in June
2007, they only represented about 1 percent of GDP, compared to 3 percent
in India, 15 percent in Chile, and 65 percent in the United States.”
Annual disbursement of new housing loans grew from 8.4 billion rupees in
2004 to 25.3 billion rupees in 2007. However, the increase in the number
of new loans is modest, from 11,177 to 13,045, reflecting a rise in average
loan size due to an increase in home prices.
As part of its advisory services for housing finance, IFC has been working
with the House Building Finance Corporation, the largest and oldest mortgage
lender in Pakistan, to develop a sustainable business plan for its operations.
IFC has also been working with the State Bank of Pakistan’s Housing Advisory
Group to create a business enabling environment. A key recommendation is
to establish a mortgage refinance company to provide long-term funding
at fixed interest rates.
IFC, a member of the World Bank Group, fosters
sustainable economic growth in developing countries by financing private
sector investment, mobilizing private capital in local and international
financial markets, and providing advisory and risk mitigation services
to businesses and governments. IFC’s vision is that poor people have the
opportunity to escape poverty and improve their lives. In FY07, IFC committed
$8.2 billion and mobilized an additional $3.9 billion through loan participations
and structured finance for 299 investments in 69 developing countries.
IFC also provided advisory services in 97 countries. For more information,
About State Bank of Pakistan
The State Bank of Pakistan is the country’s
central bank. It performs both traditional and developmental bank functions
to achieve macroeconomic goals. Its primary traditional functions include
issuing notes, regulating and supervising the financial system, last-resort
lending, serving the government, and conducting monetary policy. Secondary
functions include managing public debt and foreign exchange, advising the
government on policy matters, and maintaining close relationships with
international financial institutions. The State Bank’s nontraditional
or promotional functions include developing a financial framework, institutionalizing
savings and investment, and providing training facilities to bankers and
credit to priority sectors. The bank has also been playing an active part
in Islamic finance. For more information, visit www.sbp.gov.pk.