Banks’ financing for the housing and construction sector jumped by  75% in the past year to a total of Rs259 billion in the fiscal year that ended in June 30, earning Prime Minister Imran Khan’s praise for the unprecedented growth in advances.

The government previously identified the housing and construction sector as the potential engine of growth of the domestic economy and planned out detail to support the construction sector which would help to revive the economy.

The construction sector activated 40-70 industries in Pakistan that are associated with steel, cement, wood, and paint. It also helped the government to achieve its goal of creating job opportunities for a great number of daily wagers in the construction sector who were unemployed after the Covid-19 outbreak.

Compare to FY20, housing and construction finance outstanding increased by Rs111 billion or 75% in FY21, reaching Rs259 billion by the end of June 2021. As a result, 97% of the overall target has been met that was set for June 30, 2021.

Pakistan’s economy has increased 4% in FY21 compared to a 0.5% decline in the prior fiscal year 2020. The government’s target for economic growth is set to 4.8% for the current fiscal year 2022, National Coordination Committee on Housing, Construction and Development (NCCHCD).

It is also worth mentioning that following Prime Minister’s instructions a simple one-page application form has been designed separately for salaried persons, businessmen, and applicants with informal income to apply for such housing finance to facilitate the public as much as possible. Applicants with informal income, some very basic personal information, and payment information about house rent, utilities, and children’s education will be required. Forms will be available both in English and Urdu by the end of July 2021.

It is also advised to the banks to develop and deploy income estimation models for borrowers with informal sources of income.